End of the first day of trading

Assignment Help Finance Basics
Reference no: EM131173356

Need work shown-Phil and Terry started a new business three years ago. Two years ago, they incorporated the business and issued themselves each 20,000 shares of stock. Last year, they took the company public in an IPO and issued an additional 100,000 shares of stock at that time. The offer price was $14 a share, the spread was 8 percent, and the lockup period was six months. The stock closed at $17 a share at the end of the first day of trading. During the first six months of trading, the stock had a price range of $13 to $23 per share. During the second six months of trading, the stock sold between $15 and $21 per share. Both Tracie and Amy purchased 100 shares at the offer price. Given this, which one of the following statements is correct? Ignore trading costs and taxes.

Tracie could have earned a maximum profit of 100($23 - 17) on her investment.

Phil could have sold 5,000 shares at $23 per share.

The underwriters earned a spread equal to 8 percent of $17.

The maximum price at which Terry could have sold shares is $21.

Amy paid 108 percent of $14 per share to purchase her 100 shares.

Reference no: EM131173356

Questions Cloud

Analyze factors that contributed to the public health issue : Analyze the factors that contributed to the public health issue. Consider the appropriate regulatory agency (EPA or OSHA) and examine how it responded to this situation.
Determine the characteristics of a successful project plan : Deconstruct the project planning process and how that affects human resource management. Identify the scope of projects and the structure of the accompanying work. Use technology and information resources to research issues in managing human resource..
Calculate the seller proceeds at settlement : A home is being sold for $168,250, and the settlement is scheduled for June 28. The earnest money deposit is $1,500 and a due diligence fee $125. The seller's loan payoff is $92,589.62. The broker commission is 5.5% of sales price. Calculate the sell..
Explain the importance of situating a society cultural : Explain how key social, cultural, and artistic contributions contribute to historical changes. Explain the importance of situating a society's cultural and artistic expressions within a historical context.
End of the first day of trading : The offer price was $14 a share, the spread was 8 percent, and the lockup period was six months. The stock closed at $17 a share at the end of the first day of trading.
Each person has willingness-to-pay function : Suppose a small community of 200 people want to save a rare Toad. Each person has a willingness-to-pay function of P = 2.5 -2.0Q, where P is the per-Toad price that she or he is willing to pay to save Q rare Toads. To save a Toad, they must capture i..
Standard deviation of the stock returns : Need work shown-You find a certain stock that had returns of 14 percent, -27 percent, 19 percent, and 21 percent for four of the last five years, respectively. The average return of the stock over this period was 9.5 percent. What is the standard ..
Prepare a comparison of the compensation and benefits costs : Prepare a comparison of the compensation and benefits costs that you will deliver to the company's owners. Create at least 1 chart to visually depict the most relevant data. Address the issues of greatest concern to the owners. Provide several par..
Ethical implications of undertaking transaction : Assume that Lehman's Repo 105 transactions fall within the limits allowed by generally accepted accounting principles as Lehman's management has argued. What are the ethical implications of undertaking transactions expressly to temporarily hide ho..

Reviews

Write a Review

Finance Basics Questions & Answers

  Development of key skills and behavior by individual

Develop a list of 5 key skills or behaviors you will be working to improve. Tell me why you chose these skills. What is your current skill level in these areas?

  Effective organizational design

Identfy GE's organizational design in terms of the specific (a) structure, (b) strategic control systems, and (c) organizational culture. Cite specific information in the case that supports your identification of (a), (b), and (c) above.

  What is the yield to maturity

lorenzo cain purchased a 10000 par value bond at price of $9500. the bond has a coupon rate of 4% payable semi annually. the bond matures in 4 years. what is the yield to maturity, for this bond if interest is compounded semi annually.

  You and a few friends have just graduated from charles

picture this you and a few friends have just graduated from charles sturt university and see in the newspaper the

  Computation of break even pointseast publishing company is

computation of break even points.east publishing company is doing an analysis of a proposed new finance text-book.

  What will the price be in 6 years

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.40 per share on its stock. The dividends are expected to grow at a constant rate of 8 percent per year indefinitely.

  Determine the new objective function value

Quality Bike Maps has produced four map designs for the local area. A limited amount of time (in minutes) is allocated to the printing, cutting and folding of each map

  Social discount rate

The second discount rate is known as the social discount rate. It is based on judgments about the collective value that society attaches to a policy. Proponents argue that the social discount rate is preferred because it broadens the preferences cons..

  What premium and cost-sharing subsidies will be available

what premium and cost-sharing subsidies will be available to individuals?

  How much do you need to invest

How much do you need to invest today to reach that desired amount 12 years from now - Think of something you want or need for which you currently do not have the funds.

  Why in the question #3 of case american greetings

Why in the question #3 of case American Greetings, the calculation of total cash flow & DCF only count in the terminal value on 2015?

  What is the current market value of one of these bonds

Maryland Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.93 percent. The current market rate for similar securities is 10.79 percent.

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd