User Account

All Pages

Negative reaction to a revere stock split

Assignment Help Finance Basics
Reference no: EM131050334

Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $2 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 72 shares.

a. How many shares will he own after the reverse stock split? (Do not round intermediate calculations and round your answer to the nearest whole number.)

b. What is the anticipated price of the stock after the reverse stock split? (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. Because investors often have a negative reaction to a revere stock split, assume the stock only goes up to 80 percent of the value computed in part b. What will the stock's price be? (Do not round intermediate calculations and round your answer to 2 decimal places.)

d. How has the total value of Dean Smith's holdings changed from before the reverse stock split to after the reverse stock split (based on the stock value computed in part c)? To get the total value before and after the split, multiply the shares held times the stock price.(Input the amount as a positive value. Do not round intermediate calculations and round your answer to 2 decimal places.)

Reference no: EM131050334

Questions Cloud

Would you rather earn a nominal return : Assume inflation is .21% per month. Would you rather earn a nominal return of .71% per month, compounded monthly, or a real return of 6.53% APR compounded annually?
The bonds make semiannual payments-common stock-market : You are given the following information for Huntington Power Co. Assume the company’s tax rate is 38 percent. Debt: 10,000 6.5 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 108 percent of par; the bonds make se..
Prepare a communications plan for an organization : Prepare a Communications Plan for an organization. Scope of Task - The communications plan should cover: organizational background and stakeholders and engagement
Firms are better investments than poorly managed firms : Your broker commented that well-managed firms are better investments than poorly managed firms. As evidence, your broker cited a recent studying examining 100 small manufacturing firms that eight years earlier had been listed in an industry magazine ..
Negative reaction to a revere stock split : Because investors often have a negative reaction to a revere stock split, assume the stock only goes up to 80 percent of the value computed in part b. What will the stock's price be? (Do not round intermediate calculations and round your answer to..
Determine the probability that the next phone : Using the "crisis" and "noncrisis" phone call example, we define: Event A: The next phone call will come from Brian.
Convenience yield and cost of carry : Explain carefully the meaning of the terms convenience yield and cost of carry. What is the relationship between futures price, spot price, convenience yield, and cost of carry?
Eliminate oil price risk generated by delivery agreement : European options to buy oil in one year at a price of $50 per barrel have a forward delta of 0.1. Assume BigOil Inc. is obligated to deliver 1.25 million barrels of crude oil one year from now at a fixed price of $45 dollars per barrel. How many of t..
Identify the vertices foci and asymptotes of given functions : Identify the vertices, foci, asymptotes, length of the transverse axis, length of the conjugate axis, and eccentricity of each. Then sketch the graph.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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