Expected impact from the transation cost

Reference no: EM1352676

You work for abc in the finance department and own shares that are selling at $20 per share on the NYSE. There is a new stock offering that is going to be publicly announced. the cost from the offering will be 10% of the new offerning. The new offering will increase the number of outstanding share by 30%. There are currently 20,000,000 shares outstanding. Once the annoucement is made public, what might be the expected impact from the transation or issuane cost on each share you own

a. there will be no costs because ther is no information asymmetry prestnt
b there will be no costs because markets are perfect when it comes to new
stock offerings
c. you will lost 3% of the value of the share you own
d. you will lost 2% of the share you own

Reference no: EM1352676

Questions Cloud

Concept of conformity-ethnic groups : Discuss the concept of conformity and how it relates to your selected ethnic groups.

Why of high employee turnover : High employee turnover is a function of poor management rather than a mismatch between person and job." Do you agree or disagree, and why?

Design and algorithm that compute numbers of married men : Design and algorithm that will read through the file and compute the numbers of married men, single men, married women and single women.

What are members of self-managing teams : What are members of self-managing teams typically expected to do - Discuss the process of OD (Organizational Development) and provide an overview of its diagnostic foundations in a small business such as Venus Cleaners.

Expected impact from the transation cost : You work for ABC in finance department and own shares that are selling at $20 per share on the NYSE. There is a new stock offering that is going to be publicly declared.

Process of language acquisition : An explanation of how nature and nurture interact in the process of language acquisition.

What is the present price of this bond : She understands that the market interest rate for similar investment is 9 percent. Suppose annual coupon payments. What is the present price of this bond.

Produce positive financial gains for the shareholders : Explain what explanations for mergers and acquisitions would you offer if it were found that they rarely produce positive financial gains for the shareholders?

What is the linear magnification of lens combination : A simple camera telephoto lens consists of two lenses. The objective lens has a focal length f1 = 38.8 cm. Precisely 35.7 cm behind this lens is a concave lens with the focal length f2 = -10.3 cm. The object to be photographed is 3.97 m in front o..

User Account

All Pages