Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The Presley Corporation is about to go public. It currently has aftertax earnings of $7,500,000, and 2,500,000 shares are owned by the present stockholders (the Presley family). The new public issue will represent 600,000 new shares. The new shares will be priced to the public at $20 per share, with a 5 percent spread on the offering price. There will also be $200,000 in out-of-pocket costs to the corporation.
a. Compute the net proceeds to the Presley Corporation.
b. Compute the earnings per share immediately before the stock issue.
c. Compute the earnings per share immediately after the stock issue.
d. Determine what rate of return must be earned on the net proceeds to the corporation so there will not be a dilution in earnings per share during the year of going public.
e. Determine what rate of return must be earned on the proceeds to the corporation so there will be a 5 percent increase in earnings per share during the year of going public.
Many large corporations, such as General Motors, have written off large amounts of their nonperforming (or poorly performing) assets as they have shrunk their operations. What is the impact of these asset write-offs on the future return on assets, fu..
A new boutique line is expected to cost $25 million in initial investment. It is estimated that the business will generate $7 million after-tax cash flow each year, for the next 5 years. At the end of 5 years it can be sold for $15 million. What is t..
A Treasury bill has a bid yield of 3.58% and an ask yield of 3.52%. The bill matures in 100 days. Assume a face value of $1,000. What is the dollar spread for this bill?
Harrison Co. issued 13-year bonds one year ago at a coupon rate of 7 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.3 percent, what is the current dollar price assuming a $1,000 par value?
Net working capital is defined as current assets minus the sum of payables and accruals, and any increase in the current ratio automatically indicates that net working capital has increased. If a company follows a policy of "matching maturities," thi..
Cosmos is Inc.'s sales last year were $340,000, its operating costs were $250,000, and its interest charges were $13,500. What was the firm's time’s interest earned (TIE) ratio?
Knight Roundtable Co. has annual credit sales of $1,080,000 and an average collection period of 32 days in 2008. Assume a 360-day year. What is the company’s average accounts receivable balance? Account receivable are equal to the average daily credi..
How did the backgrounds of both Geithner and Bernanke serve to assist or hinder them in understanding and acting to solve the problems?
Pippi’s Puppies Inc. has an unlevered beta of 0.80. The firm currently has no debt, but is considering changing its capital structure to be 30% debt and 70% equity. Its corporate tax rate is 30%, rRF = 4% and the market risk premium is 5%. What is th..
MM Proposition II without taxes implies that the required return on equity is:
Yesterday, Enviromax Systems paid a dividend of $5. You expect that dividends will grow at a rate of 6% per year. Shareholders' required rate return is 9%. According to the Dividend Discount Model, what should be the price of the stock? Assume that a..
The common stock of? Moe's Restaurant is currently selling for ?$76 per? share, has a book value of $58 per? share, and there are 1.19 million shares of common stock outstanding. In?addition, the firm also has 107,000 bonds outstanding with a par val..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd