What is the immediate dilution based on the new corporate

Assignment Help Finance Basics
Reference no: EM13279207

Jordan Broadcasting Company is going public at $40 net per share to the company. There also are founding stockholders that are selling part of their shares at the same price. Prior to the offering, the firm had $24 million earnings divided over eight million shares. The public offering will be for five million shares; three million will be new corporate shares and two million will be shares currently owned by the founding stockholders. A. What is the immediate dilution based on the new corporate shares that are being offered? B. If the stock has a P/E ratio of 23 immediately after the offering, what will the stock price be? C. Should the founding stockholders be pleased with the $40 they receive for their shares?

Reference no: EM13279207

Questions Cloud

What should be the price of the first bond : Another 10-year bond has an 8% semi-annual coupon. This bond is selling at par value. Both bonds have the same risk and thus same required return. What should be the price of the first bond?
Determine the average power loss : A series RLC circuit consists of a 100 ? resistor, a 0.190H inductor, and a 42.0 ?F capacitor. It is attached to a 120 V/60 Hz power line. What is the average power loss
Calculate the diode current for the forward bias : A pn-junction is uniformly doped and has dopant concentration of NA = 4 x10^16 cm^-3 in the pregion at 300K. At zero bias, 20% of the total space charge region (W) is extended in the pregion. Calculate Vbi, ND, W, xn and xp.
Describe decomposition in the rate constant : In a first order decomposition in which the rate constant is 0.201 sec-1, how long will it take (in seconds) until 0.131 mol/L of the compound is left, if there was 0.566 mol/L at the start
What is the immediate dilution based on the new corporate : A. What is the immediate dilution based on the new corporate shares that are being offered? B. If the stock has a P/E ratio of 23 immediately after the offering, what will the stock price be? C. Should the founding stockholders be pleased with the..
Find with what force must you pull : The tune-up specifications of a car call for the spark plugs to be tightened to a torque of 48Nm. With what force must you pull
Compute the work done by the force of gravity : Starting from rest, a 4.4-kg block slides 2.70 m down a rough 30.0° incline. The coefficient of kinetic friction between the block, Determine the work done by the force of gravity
What are the reasons that a company making capital structure : What are the reasons that a company making capital structure management decisions not use that mechanism that had the lowest cost?
Calculate armature current and the counter-emf : A shunt motor rotating at 1500 rpm is fed by a 120V dc source. The line current is 51 A and the shunt-field resistance is 120 ohm. If the armature resistance is 0.1 ohm, calculate armature current and the counter-emf (Ea)

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is the companys cost of equity capital

The new stock has an estimated flotation cost of $3 per share. What is the company's cost of equity capital?

  Scribe agency conflict and the measures

scribe agency conflict and the measures that can reduce the possibility of such a conflict in a corporation.

  What would the risk-free rate have to be

Stock Y has a beta of 1.25 and an expected return of 12.6 percent. Stock Z has a beta of .8 and an expected return of 9.9 percent. Required: What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

  What is the dollar size of the issue

D. Butler Inc. needs to raise $14 million. Assuming that the market price of the firm's stock is $95, and flotation costs are 10 percent of the market price, how many shares would have to be issued? What is the dollar size of the issue?

  Calculate company margin of safety

Van Roekel Corporation sells a single product. The product has a selling price of $100 each unit and variable expenses of 80 percent of sales. If the company's fixed expenses total $150,000 each year,

  Find the implied growth rate

The common stock of XYZ is expected to pay dividends of $1.25 next year and currently sells for $25. Assume that the firm's future dividend payments are expected to grow at a constant rate. Find the implied growth rate assuming that the required r..

  Long-run profit opportunities from investing

What does this concept imply regarding the long-run profit opportunities from investing in international markets? What market conditions should prevail for concept to be valid?

  What will be tip-top''s cost of equity

1. The Tip-Top Paving Co. wants to be levered at a debt to value ratio of .6. The cost of debt is 11%, the tax rate is 34%, and the cost of equity for an all equity firm is 14%. What will be Tip-Top's cost of equity?

  The coupon rate for a particular quality of bond

When the market interest rate rises above the coupon rate for a particular quality of bond and the bond price declines, the new expected yield is called

  Difference in their savings account balances

Christie adds $2,000 to her savings account on the first day of each year. Find out the difference in their savings account balances at the end of 25 years?

  Determine the net present value of the project

A project requires a net investment of $450,000. It has a profitability index of 1.25 based on the firm's 12 percent cost of capital. Determine the net present value of the project.

  Normal cost of capital

Myers Business Systems is estimating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given below:

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