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What is the new statement of shareholders equity

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Q1. Stonges Corp Inc has 30 million common shares outstanding, and they have a new project in mind, the investment needed is €120 million. The current Corp.'s stock price is 68€

Beating is debating between two scenarios:

1. Three shares of outstanding stock are entitled to purchase one additional share of the new issue.

2. Seven shares of outstanding stock are entitled to purchase one additional share of the new issue.

What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under scenarios 1 and 2?

Q2. Chezbran, Inc., has 350,000 shares of stock outstanding. Each share is worth 140€, so thecompany's market value of equity is 49,000,000€. Suppose the firm issues 70,000 new shares at the following prices: 135€, 140€,145€. What are the number of rights needed in each case? What will the effect be of each of these alternative offering prices on the existing price per share?

Q3. Gamma corporation would like to rise 160,000,000€ via rights offering. Today Gamma has a price per share of 210€, and their outstanding stocks are 100,000,000. The company has agreed to go forward with the rights offering entering into an agreement with Capstik investment bank, who will charge a 7% spread. Capstik has fixed the subscription price at a value of 120€ per share. You owe a 2.5% of the company, and you decide to sell your rights, how much money van you ask for your rights?

Q4. The company Eversmall Inc. with the shareholders equity shown below declares a stock dividend of 21 percent. The market value of its common stock is €135 per share, while the par value is 5€. Common stock 250.000 € Capital surplus 12.000.000 € Retained earnings 41.650.000 € Total owners' equity 53.900.000 €

a) How many shares are they going to issue?

b) What is the new statement of shareholders Equity?

Q5. Deville corporation has 6 million shares of stock outstanding that sell for €89 per share. Imagine there are no taxes, what will be the price per share and the new number of shares outstanding after:

1. A five-for-three stock split?

2. A 20 percent stock dividend?

3. A three-for-five reverse stock split?

Reference no: EM133062428

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