Calculate the current market value of firm equity

Assignment Help Financial Management

Reference no: EM131910969

You work in the Finance Department for Flynn, Inc. Your firm needs to raise $4,500,000,000 ($4.50B) to finance new capital investments. Your boss is considering raising this capital using a rights offering. He has asked you to analyze the effect of such an offering on the firm’s shareholders.

The firm has 550,000,000 shares outstanding. These are currently selling on the stock exchange for $26.82.

Calculate the current market value of firm equity.

To raise the needed $4,500,000,000 in new capital, your boss is considering issuing new shares at a subscription price of $20 in the rights offering.

How many new shares will the firm need to issue to raise the $4,500,000,000? Calculate the number of rights that will be needed to purchase a new share. During the subscription period, what will be the market value of a right?

After the rights offering, what will be the firm value? The number of outstanding shares? The share price?

Reference no: EM131910969

Questions Cloud

What is minimum uncertainty in position of electron : The wavelength of an electron beam is measured to be 900.0 nm. What is the velocity of the electrons?

Explain a current issue on a pharmacological agent : Explain a current issue on a pharmacological agent and your opinion? Support with 1 peer reviewed journals no older than 5 years and APA style.

Create a tiff drawing of your rendered planting plan : GRAF 7006 DESIGN VISUALIZATION Skills Bootcamp Lab - Introduction to Photoshop. Create a tiff drawing of your rendered Planting Plan

Kinetics of the metabolism of the drug : Sotalol is a drug with beta-blocker and antiarrhythmic action. The kinetics of the metabolism of the drug were followed by concentration

Calculate the current market value of firm equity : Calculate the current market value of firm equity.

Calculate the pro rata portion of shares : Calculate the pro rata portion of shares that the winning bidders will receive for the number of shares they bid.

What types of programs are students familiar with : What types of programs are students familiar with? What areas do they feel are not well addressed? How would they improve this situation if given the chance?

Electron configuration as a phosphide ion : 1) Name at least three atoms or ion has the same electron configuration as a phosphide ion?

Describe the beliefs of health of the brazilian heritage : Describe the Baltic nations and how they view the delivery of health care. Describe the beliefs of health of the Brazilian heritage.

User Account

All Pages