What is price per share of equity under plan

Assignment Help Financial Management

Reference no: EM131049076

Cooke Co. is comparing two different capital structures. Plan I would result in 9,000 shares of stock and $430,000 in debt. Plan II would result in 12,600 shares of stock and $275,200 in debt. The interest rate on the debt is 9 percent. The all-equity plan would result in 19,000 shares of stock outstanding. Ignore taxes for this problem.

Required:

(a) What is the price per share of equity under Plan I?

Price per share $

(b) What is the price per share of equity under Plan II?

Price per share $

Reference no: EM131049076

Questions Cloud

Rolling out this new company-wide quality initiative : Tasks for Part 2 will be completed in Week 5 and will be 250-300 words. The project deliverables for this week are as follows:Week 5: Roll-Out

The required rate of return on the market : The risk-free rate of return is 6%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 2.5. If the dividend per share expected during the coming year, D1, is $2.20 and g = 5%, at what price should a share..

Impact on poverty reduction and viability : Evaluate microfinance institutions (MFIs) of developing countries in terms of their performance (impact on poverty reduction) and viability (profitability). Provide four evidences (two for each – performance and viability) to support your answer. Ans..

Planning to develop new software : Systems Software (P) Ltd. is planning to develop new software. It has identified the activities in the table below for this software development project and has calculated three time estimates in days for each of the activity.

What is price per share of equity under plan : Cooke Co. is comparing two different capital structures. Plan I would result in 9,000 shares of stock and $430,000 in debt. Plan II would result in 12,600 shares of stock and $275,200 in debt. What is the price per share of equity under Plan I? What ..

Refinancing the outstanding mortgage balance at lower rate : Assume a 25-year, $490,000 mortgage with a rate of 7.2 percent. 9 years into the mortgage, rates have fallen to 6.2 percent. What would be the monthly saving to a homeowner from refinancing the outstanding mortgage balance at the lower rate?

Explain how a butterfly spread can be created : Three call options on a stock have the same expiration date and strike prices of $55, $60, and $65. The market prices are $3, $5, and $8, respectively. Explain how a butterfly spread can be created. Construct a table showing the payoffs from the stra..

Essay - tourism in pacific asia : Essay - Tourism in Pacific Asia. Critically discuss the following statement: "The positive economic, sociocultural and/or environmental benefits that tourism can achieve for the host community far outweigh any negative impacts brought about by to..

The cost of equity be if the debt-equity ratio were zero : Crosby Industries has a debt-equity ratio of 1.2. Its WACC is 13 percent, and its cost of debt is 4 percent. There is no corporate tax. What is Crosby’s cost of equity capital? What would the cost of equity be if the debt-equity ratio were 2? What wo..

User Account

All Pages