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Taylor Corporation wants to raise $40 million. Its stock price is now $25 per share. The new issue will be priced at $23 per share. The company will incur expenses of $1 million. The underwriters' compensation will be 8% of the issue price and the underwriter will incur expenses of $1.2 million. a. How many shares of stock must be sold for the company to net $40 million after costs and expenses? b. Calculate the profit or loss for the investment banker?
If the stock price is $33.97, what required return must investors be demanding on Storico stock? (Hint: Set up the valuation formula with all the relevant cash flows, and use trial and error to find the unknown rate of return.)
The main firm is a zero growth firm with an expected EBIT of $100,000 and a corporate tax rate of 30%. Main uses $500000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%. What is Main's cost of equity?
using the proceeds on a stock repurchase. Ignore taxes. How many shares can the firm repurchase if it issues the debt securities?
You have $40,000 to invest on Sophie Shoes, a stock selling for $80 a share. The intial margin requirement is 60%. Ignoring taxes & commissions,
A company issued a 9% annual coupon bonds that are now selling at a yield to maturity of 10% and current yield of 9.8375%. what is the remaining maturity of these bonds?
Net earnings before deducting minority share of earnings is utilized in the following ratios, since noncontrolling interests are included in the base. Which ratio is an exception to this statement?
Bartiromo, Inc. bonds have a 6% coupon rate with semi-annual coupon payments and a $1,000 par value. The bonds have 14 years until maturity, and sell for $950. What is the current yield for Bartiromo's bonds?
What is the internal rate of return of a project that requires and investment of $1366 today and provides a single cash flow in year 5 of $1945. The appropriate discount rate is 10%.
You have another $8,000 to invest, and would like to invest it in a manner such that the risk of the new portfolio matches that of the overall market. What does the beta of the new security have to be?
Which one of the following is a capital budgeting decision?
At what rate have sales been growing? Round your answer to the nearest hundredth.
A firm issues a 10-year debt obligation that bears a 12% coupon rate and gives the investor-Calculate the after-tax cost of debt, assuming the debt remains outstanding until maturity.
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