Find the immediate dilution potential

Assignment Help Financial Accounting
Reference no: EM1314357

Immediate dilution potential for new stock issue.

 1. Hamilton Control Systems will invest $90,000 in a temporary project that will generate the following cash inflows for the next three years.

Year

Cashflow

1

$23,000

2

38,000

3

60,000

The firm will be required to spend $15,000 to close down the project at the end of three year. If the cost of capital is 10 percent, should the investment be undertaken? Use the net present value method.

2. The Hamilton Corporation currently has 4 million shares of stock outstanding and will report earnings of $6,000,000 in the current year. The company is considering the issuance of 1 million additional shares that will net $30 per share to the corporation.

a. What is the immediate dilution potential for this new stock issue?

b.Assume the Hamilton Corporation can earn 10.5 percent on the proceeds of the stock issue in time to include them in the current year's results. Should the new issue be undertaken based on earnings per share?

Reference no: EM1314357

Questions Cloud

Calculate the adjacent matrix and find its inverse : Calculate the adjacent matrix and find its inverse.
Computation of current yield and ytm and bond price : Computation of current yield and YTM and bond price and Assume that the yield to maturity remains constant for the next 3 years
Determine frames division''s contribution margin : Determine Frames Division's contribution margin for this product and What amount would be considered the maximum price (ceiling) in this example and what price would be the maximum price (floor)
Standard deviation of the population : This distribution is positively skewed. The standard deviation of the population is not known.
Find the immediate dilution potential : Find the immediate dilution potential for this new stock issue and Should the new issue be undertaken based on earnings per share?
Computation of value of bond : Computation of value of bond and What is the value of an individual bond from this issue to an investor who purchases the Wilson bond on the date of issue
Research question development : Develop the management-research question hierarchy that   will help you to develop a specific proposal.
Evaluate the full unit product costs for widgets : Evaluate the full unit product costs for Widgets and Gadgets using the traditional costing system and Find the full unit product costs for Widgets and Gadgets using the ABC system.
Calculation of yield to maturity : Calculation of yield to maturity and The bond has an 8 percent semiannual coupon and a par value of $1,000

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare an acquisition analysis

2) Give all required consolidation adjustment entries needed to prepare the consolidated financial statements as at 30 June 2010.  The balance sheets and income statement of ABC Ltd and XYZ Ltd can be found on the worksheet.

  Describe how a chapter bankruptcy filing by the company

Describe the defenses the company could maybe assert against this third party's lawsuit. Include in your explanation the applicability of these legal defenses to the facts of this particular case.

  Prepare a report on companys revenue for december

Prepare a report showing the spending variances and company's revenue for December.

  Evaluate the total cost of the potential job

Evaluate the total cost of the potential job using traditional overhead application (i.e. direct labor hours to assign overhead)

  Prepare a statement of cash flows

Prepare a statement of cash flows (indirect method). Ignore tax effects and Statement of cash flows.

  Determine the irr for blue snow''s

Determine the IRR for Blue Snow's snowboard project and determine the NPV for Blue Snow's snowboard project

  Describe how the accounting equation is impacted

Describe how the Accounting Equation is impacted

  Income statements and the retained earnings statement

Purpose two income statements and the Retained Earnings Statement. Use the single-step format and multiple-step income formats and income statement in the period

  Prepare an income statement for the year 2010

Prepare an income statement for the year 2010, starting with Income from Continuing Operations before Taxes (part a). Consider the tax rate was 40%.

  Determine the following amount of materials price variance

Determine the following amount of materials price variance to be prorated to complete goods inventory at Dec. 31

  Evaluate the price and quantity variances

Evaluate the price and quantity variances and purpose Direct materials Price Variance Efficiency varianceLabor rate variance Labor Efficiency Variance and pass necessary comments.

  Disclosure of notes payable in financial statements

Disclosure of notes payable in financial statements - How much of the $1,000,000 notes payable could be classified as present in Reeds balance sheet at December, 2007?

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