What is the stock price per share-pennewell publishing inc

Assignment Help Finance Basics
Reference no: EM132688941

Pennewell Publishing Inc. (PP)

Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. PP's current cost of equity is 10%, and its tax rate is 25%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00.

Refer to the data for Pennewell Publishing Inc. (PP). Assume that PP is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity. This results in a weighted average cost of capital equal to 9.125% and a new value of operations of $657,534. Assume PP raises $230,137 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

Reference no: EM132688941

Questions Cloud

How much cash should be distributed to peterson : Laney, Capital $340,000, and Howell, Capital $90,000. The income ratio is 6:2:2, respectively. How much cash should be distributed to Peterson?
Explain an option for international fund flow : 1. Explain similarities and differences between Banking treasury management and Corporate treasury manageme
What is the expected change in net income : The interest rate on the notes payable is 10%, and the tax rate is 25%. If the firm implements the plan, what is the expected change in net income?
What is alex share of the net income : What is Alex's share of the $450,000 net income? The partnership agreement specifies that Alex and Browning have a salary allowance of $120,000
What is the stock price per share-pennewell publishing inc : Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. PP's
Which circumstances may a stockholder be personally liable : Which circumstances may a stockholder be personally liable? If stock is bought above its stated value. / if stock was bought below its par value
Construct a cash budget for a typical month : Construct a cash budget for a typical month and calculate the average net cash flow during the month.
Find effective annual percentage cost of funds : Noddings Inc. needs to raise more capital because its business is booming. The company purchases supplies on terms of 1/10 net 20, and it currently takes
Prepare a final strategic operational plan proposal : Prepare a final Strategic Operational Plan Proposal (SOPP) based on the scenario given and the SOPP template provided. Incorporate any useful feedback.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial impact on a company

Describe how any FIVE (5) of the usual indirect costs may have a financial impact on a company.

  Analysis of crises could attempt

PDR-303605 - Modelling Financial Crisis - Financial crises seem to hit the markets with surprising frequency; What is the explanation for these events

  Calculate the price of the bond if it is held to maturity

You have invested in a commercial bond issued by FHL, listed on SPX. The bond has a face value of $150,000 and pays coupons

  Justify an investment policy statement

Formulate and justify an investment policy statement and your policy statement must encompass all relevant objective and constraints consideration.

  Use a recent within the last 30 days from the date of your

assignment on international financeuse a recent within the last 30 days from the date of your assignment issue of the

  Cash management approach

A corporation uses a Miller-Orr cash management approach with a lower limit of $50,000, an upper limit of $130,000, and a target balance of $75,000.

  What did george do that may have concerned the bank

Prepare an income statement, a statement of shareholders' equity, a balance sheet, and statement of cash flows for the period. What did George do that may have concerned the bank? Explain.

  How does the priority of different security holders

1. explain the relationship between risk and return. whatcan an investor do to reduce risk?2. how does the priority of

  Computation of ratios for given financial data''s

Computation of ratios for given financial data's using Interest Coverage Ratio and Profit Margin

  Construct the pro-forma statement of comprehensive income

FNCE 370v9 Assignment Questions - Construct the pro-forma statement of comprehensive income and statement of financial position for Delta Corporation for 20X3

  Explain impact of the adjustment in the financial statement

A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equipment.

  What will us annual production be

According to the U.S. Energy Information Administration's Annual Coal Report, 896 million short tons of coal were mined in the U.S. in 2016.

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