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The firm Davis, Martin and Zanders, Inc. (DMZ)has announced that it will issue 10 million shares of common stock through a rights issue at a subscription price of $20. Before the announcement, DMZ shares were trading at $26, and there were 50 million shares outstanding.
A. How many rights will DMZ grant to its existing shareholders?
B. How many rights will it investor need to buy one DMZ share?
C. What will happen to DMZ's share price when the rights issue is announced?
D. What should be the value of one right?
Why might it be easier for an investor desiring to diversify his portfolio internationally to buy depository receipts rather than the actual shares of the company?
A stock had annual returns of 16 percent, 8 percent, -17 percent, and 21 percent for the past four years. Based on this information, what is the 95 percent probability range of returns for any one given year?
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Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $120,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $575,000 p..
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Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities.
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