Outstanding shares of webster mills

Assignment Help Financial Management

Reference no: EM13877960

You currently own 6 percent of the 2 million outstanding shares of Webster Mills. The company has just announced a rights offering with a subscription price of $50. One right will be issued for each share of outstanding stock. This offering will provide $18 million of new financing for the firm, ignoring all issue costs. Assume that all rights are exercised. What will be your new ownership position if you opted to sell your rights rather than exercise them personally?

A. 5.08

B. 4.58

C. 4.83

D. 5.33

Reference no: EM13877960

Questions Cloud

How much of their assets is financed with equity : Nicole's Neon Signs, Inc. reported a debt to equity ratio of 1.9 times at the end of 2013. If the firm's total assets at year-end are $100 million, how much of their assets is financed with equity?

How do you do this on a financial calculator : You are considering a 20-year, $1,000 par value bond. Its coupon rate is 8%, and interest is paid semiannually. If you require an "effective" annual interest rate (not a nominal rate) of 10.03%, how much should you be willing to pay for the bond?

Best estimate of the stocks current intrinsic price : Decker Tires’ free cash flow was just FCF0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC for this company 9.00%. Decker has $4 million..

What is expected capital gains yield for coming year : One year ago Clark Company issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065, and it now sells for $1,270. What is the expected capital gains (or loss) yield for..

Outstanding shares of webster mills : You currently own 6 percent of the 2 million outstanding shares of Webster Mills. The company has just announced a rights offering with a subscription price of $50. One right will be issued for each share of outstanding stock. This offering will prov..

Example of when the underlying circumstances are favorable : Consider each of the following situations independently of each other. For each of the situations, provide one example of when the underlying circumstances may be such that the observed trend is unfavorable, and one example of when the underlying cir..

Actions on cash levels and current ratio : Indicate the effect of the following actions on cash levels and current ratio. Assume the company has a current ratio greater than one. Indicate whether the effect is to increase (I), decrease (D), or if it has no effect (NE). Consider each action in..

Maturity annualized spot rates : Consider the following annualized spot rates: Maturity Annualized Spot Rates. Based on this information calculate the implied six-month forward rate one-and-a-half years from now.

Stock with a beta : You bought a stock with a beta of 1.4 and earned a return of 8.3%. Did you outperform the market if, during the same period, the market rose by 7.4% and you could have earned 5.4% by investing in a Treasury bill?

User Account

All Pages