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!
Question: I. B. Michaels has a chance to participate in a new public offering by Hi-Tech Micro Computers. His broker informs him that demand for the 500,000 shares to be issued is very strong. His broker's firm is assigned 15,000 shares in the distribution and will allow Michaels, a relatively good customer, 1.5 percent of its 15,000 share allocation. The initial offering price is $30 per share. There is a strong aftermarket, and the stock goes to $33 one week after issue. The first full month after issue, Mr. Michaels is pleased to observe his shares are selling for $34.75. He is content to place his shares in a lockbox and eventually use their anticipated increased value to help send his son to college many years in the future. However, one year after the distribution, he looks up the shares in The Wall Street Journal and finds they are trading at $28.75.
a. Compute the total dollar profit or loss on Mr. Michaels's shares one week, one month, and one year after the purchase. In each case compute the profit or loss against the initial purchase price.
b. Also compute this percentage gain or loss from the initial $30 price and compare this to the results that might be expected in an investment of this nature based on prior research. Assume the overall stock market was basically unchanged during the period of observation.
c. Why might a new public issue be expected to have a strong aftermarket?
If the tax rate is 40 percent, what is the OCF for this project?
What are the three ways in which derivatives can be misused? Contrast dollar return and percentage return.- Compare and contrast options and forward markets.
If you hold your 10 percent of the firm constant and buy the municipal bonds, what is your annual after-tax gain from this transaction?
Keep in mind that NPV is the value in today's dollars of cash flows to be received some time in the future minus what we must pay today to get those cash flows.
explain why holders of a firms debt should insist on a covenant that restricts the amount of cash dividends the firm
If interest is 8.45% compounded annually, what was the original mortgage balance?
The financial statements for the current year reflect an interest paid amount of $18,700 and dividends of $22,000. What is the amount of the net new borrowing?
You are the Vice President of Sales for Detroit Mini Safe, a U.S. manufacturer of small fireproof safes with headquarters in Detroit, Michigan. The raw materials used in making the safes are sourced from Japan, Canada, and Saudi Arabia.
Explain the components and elements required to develop and design an effective and visually appealing blog. Students will use the feedback they receive from each other to improve their own Blogs
This paper examines the role of earnings management in affecting a firm's cost of capital. Using an agency model with multiple firms whose cash flows are correlated, it demonstrates the extent of earnings manipulation which varies across the busin..
mcdougal entertainment is offering 75000 shares of stock to thepublic in a general cash offer. the offer price is 36 a
A stock just paid a dividend of $3.0, and dividends will increase by 2.0% every year. Its required rate of return is 18.0%. What is the value of the stock?
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