What is the purpose of an ipo

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Can somebody help me to solve there questions. Thank you

1. Woolworths Ltd shares are trading at $37.53, it has 1.25 billion ordinary shares issued and annual earnings available to ordinary shareholders of $2.35 billion.

i. What is Woolworths P/E ratio?

ii. Due to new entrants into the industry, you predict that Woolworths annual earnings available to ordinary shareholders will drop to $2.1 billion. Estimate the expected impact on its share price. iii. What assumptions underlie your above analysis?

2. Calculate the growth rate in Wesfarmers Ltd dividends given its annual dividend has increased from $0.73 in 2003 to $1.80 in 2016. Assuming this growth rate continues and that investors require a return of 12%, estimate the company's share price just after the 2016 dividend was paid?

3. Briefly explain the contributions made by the share market to the financial system ?

4. What is the purpose of an IPO? Explain the terms 'road show', 'bookbuild' and 'underpricing' in reference to the IPO process?

Reference no: EM131811327

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