What is the new market value of the company

Assignment Help Finance Basics
Reference no: EM132473897

Problem: Leah, Inc., is proposing a rights offering. Presently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each.

a. What is the new market value of the company? (Do not round intermediate calculations.)

b. How many rights are associated with one of the new shares? (Do not round intermediate calculations.)

c. What is the ex-rights price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

d. What is the value of a right? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM132473897

Questions Cloud

Alternative offering prices on the existing price per share : Nemesis, Inc., has 245,000 shares of stock outstanding. Each share is worth $87, so the company's market value of equity is $21,315,000.
Determine cost of land and land improvements : Determine cost of land and land improvements. What is the cost of the equipment? Identify operating and capital expenditures.
ACE Project - Optimisation of Aircraft Structures : EN3300 ACE Project- Optimisation of Aircraft Structures. Find the Optimisation of the Aircraft Structures. Design aerospace structures reduces cost of materials
What should be the 12-month interest rate : If inflation in the next 12 months is expected to be 4% and investors in general require a real rate of return of 2%. What should be the 12-month interest rate?
What is the new market value of the company : Leah, Inc., is proposing a rights offering. Presently there are 500,000 shares outstanding at $46 each. There will be 125,000 new shares offered at $38 each.
What is the company cost of equity capital : If the risk-free rate is 5.4 percent and the expected return on the market is 12 percent, what is the company's cost of equity capital?
Explain how external factors affect organisations : explain how external factors affect organisations and how changes in the external environment affect organisational strategy
What is a business transaction : What is a business transaction? When business transactions occur, at least three of the individual balance sheet items must change
Why would investors want a board to be declassified : Why would investors want a board to be declassified? What are the advantages and disadvantages?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the effective cost of the reserve requirement

Assuming a required reserve ratio of 5%, interest rate on reserves of 1%, and interest rate on loans of 6%, what is the effective cost of the reserve.

  How the market value of the shares has been affected

Assuming that there is a perfect market in St James' Ltd's shares, and that the market uses a dividend valuation model, show how the market value of the shares has been affected by the Board's decision.

  What before-tax dividend yield would preferred shares

An investor faces a combined (federal and provincial) tax rate of 42 percent, with provincial tax being 40 percent of federal tax.

  Find out external environmental scan

In order to develop effective strategies, it is critical to understand the marketplace environment. In this assignment you will explore the relationship between marketplace positioning based on environmental factors.

  What is the expected return of portfolio

The correlation of the bond fund and the stock index is 0.1.

  Describe factors that are used in the npv and fv formulas

Analyze the factors that are used in the NPV and the FV formulas. Give an example of how to use the formulas for NPV and FV for a stock purchase.

  What is the mean commute time for the given cities

The average time that Americans commute to work is 27.7 minutes (Sterling's Best Places, April 13, 2012). The average commute times in minutes for 48 cities.

  Download the most current annual financial statements

Click on "Financials and Filings." Click on "Trended Financial Statements." Download the most current annual financial statements.

  What is the value of a perpetuity with an annual payment

What is the value of a perpetuity with an annual payment of $70 and a discount rate of 5%?

  Management decisions regarding special terms

How does TVM affect management decisions regarding special terms, such as "no payment due for 6 months, interest free," or "buy a gift card for $50 and get $5 off your next purchase?" What TVM calculations would have to be considered in offers lik..

  Standard deviation-expected return

What is the expected return of this stock? What is the standard deviation rounded to the nearest whole number

  Explain how high-growth technology companies finance their

explain how high-growth technology companies finance their operations. discuss the advantages and disadvantages

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