Find the immediate dilution potential

Assignment Help Financial Accounting
Reference no: EM1314357

Immediate dilution potential for new stock issue.

 1. Hamilton Control Systems will invest $90,000 in a temporary project that will generate the following cash inflows for the next three years.

Year

Cashflow

1

$23,000

2

38,000

3

60,000

The firm will be required to spend $15,000 to close down the project at the end of three year. If the cost of capital is 10 percent, should the investment be undertaken? Use the net present value method.

2. The Hamilton Corporation currently has 4 million shares of stock outstanding and will report earnings of $6,000,000 in the current year. The company is considering the issuance of 1 million additional shares that will net $30 per share to the corporation.

a. What is the immediate dilution potential for this new stock issue?

b.Assume the Hamilton Corporation can earn 10.5 percent on the proceeds of the stock issue in time to include them in the current year's results. Should the new issue be undertaken based on earnings per share?

Reference no: EM1314357

Previous Q& A

  Computation of value of bond

Computation of value of bond and What is the value of an individual bond from this issue to an investor who purchases the Wilson bond on the date of issue

  Research question development

Develop the management-research question hierarchy that   will help you to develop a specific proposal.

  Evaluate the full unit product costs for widgets

Evaluate the full unit product costs for Widgets and Gadgets using the traditional costing system and Find the full unit product costs for Widgets and Gadgets using the ABC system.

  Calculation of yield to maturity

Calculation of yield to maturity and The bond has an 8 percent semiannual coupon and a par value of $1,000

  Identify appropriate method of data collection

A survey of the residents of a new subdivision on why they happened to select that area in which to live. You also wish to secure some information about what they like and do not like about life in the subdivision.

  Calculation of current price of the bond

Calculation of current price of the bond and its yield to maturity is 10 percent with semiannual compounding

  Borrowings and open market purchases

Recently, a troubled bank borrowed $800 million from the Federal Reserve. Describe the impact this event had on the monetary base.

  Determine the cost of equity capital

Determine the cost of equity capital using the following methods, Constant growth rate dividend capitalization model approach and the capital asset pricing model approach

  Proportions for the two commercials

If the computed value for this problem is +2.33, and the level of significance is 0.05, can we conclude that the recall proportions for the two commercials are same?

  Changes on monetary base

Calculate the effect of the following events on the monetary base:

Reviews

Write a Review

 

Similar Q& A

  Freed capacity to launch a new product

Suppose that if the thermostats were purchased, Climate-Control, Inc., could use the freed capacity to launch a new product. The segment margin of the new product would be $65,000 per year. Should Climate-Control, Inc., accept the offer to buy the..

  What could be your response to the ceo

What could be your response to the CEO

  Create normal costing journal entries

Create normal costing journal entries for each of the subsequent events. You will also need the subsequent information: Overhead was evaluated at $50,000 for the year and direct labor hours

  Evaluate the amount of net short-term capital gain

Evaluate the amount of net short-term capital gain (NSTCG) or net short-term capital loss (NSTCL). Evaluate the amount of net long-term capital gain (NLTCG) or net long-term capital loss (NLTCL).

  Job order cost system

How does management decide whether to use a job order cost system or a process cost system in any given manufacturing situation? Explain briefly

  Average cost per diner for serving

Convert the total costs you computed to costs per diner. Average cost per diner for serving each of the following parties A party of four diners who three drinks in total.

  What was disney''s amount of working capital

What was Disney's amount of working capital at year-end 2004?  Did it change significantly and Compute the working capital ratio at year-end 2004 and year-end 2003.  Did it improve or deteriorate between 2003 and 2004?

  Purpose a pension worksheet for the pension plan

Purpose a pension worksheet for the pension plan for 2013 and 2014.

  Affect pre-tax profits

Calculation of no. of days in conversion cycle - how much cash would be freed up, and how would that affect pre-tax profits

  Show conceptual issues involved and the definition of assets

Show the conceptual issues involved and the definition of assets that can be applied in evaluating whether development expenditure should be treated as an asset or an expense.

  Greeting card industry position and formulating plan

Greeting card industry position and formulating plan - For the chosen trend, you are to comment on how the trend strengthens or weakens the competitive advantage and industry position strength of Shomei Cards and its competitors.

  Difference between financial and managerial accounting

Difference between financial accounting and managerial accounting.

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