Calculate the new book value per share

Assignment Help Finance Basics

Reference no: EM1355819

A company currently has 10 million shares outstanding and no debt. They wish to expand. The stock sells for $50 per share, but the book value per share is $20. Net income for the company is currently $18 million. The new facility will cost $40 million and it will increase new income by $500,000.

Calculate the new book value per share, the new total earning, the new EPS, the new stock price, and the new market-to-book ratio.

Assuming an instant price-earning ration what will the effect be of issuing new equity to finance the investment?

What would the new net income for the company have to be for the stock price to remain unchanged?

Reference no: EM1355819

Questions Cloud

Illustrate what is the maximum profit : Illustrate what is the maximum profit. Suppose that the fixed cost rises to $200,000. How would this affect the profit-maximizing price.

Importance and usefulness of accounting cycle : Please discuss the value of the accounting cycle to a company including: Normal length of the cycle-Integration with required governmental reporting

Describing use of kerberos for mutual authentication : Answer the following in relation to a scenario where Bob and Alice use Kerberos for mutual authentication. When Bob receives a ticket from Alice, how does he know it is genuine?

Diversity and multiculturalism : Discuss how ethical codes address diversity perspectives and multicultural concerns. What are the strengths and limitations of these codes concerning diversity and multiculturalism?

Calculate the new book value per share : A corporation currently has 10 million shares outstanding and no debt. They want to expand. The stock sells for $50 per share, but the book value per share is $20.

Discussion questions for global business management : Explain what are some questions that can be use as a weekly discussion questions for Global Business Management?

Stocks-equity and journal entries : The Cosmo Company was started by issuing 800 shares of $10 par value stock at an average market price of $20 per share. Prepare journal entries to record the treasury stock transactions. Prepare the equity section of the balance sheet for Cosmo Compa..

Show cultural differences : Would you agree that there are more commonalities than differences and that opening that door of commonalities we will be able to have a newer approach about threats?

Civil war change any opportunity price in the south : In what did the South have a comparative advantage. Did the Civil War change any opportunity price in the South.

User Account

All Pages