The flotation cost adjusted initial outlay

Assignment Help Financial Management
Reference no: EM131621999

The Pandora Internet Radio Company was started in 2000 to provide a personalized radio listening experience over your computer or iPhone and is privately owned. However, its success could easily lead its owners to take the company public with the sale of common stock to the public. When companies sell common stock for the first time the flotation cost can be very high. If Pandora needs $75 million to finance an acquisition and sells shares to the public, how much stock would they have to sell if flotation costs are expected to be 15%?

The flotation cost adjusted initial outlay is $ (Round to the nearest dollar.)

Reference no: EM131621999

Questions Cloud

For the indexing bond portfolio managing strategy : The tracking error is measure by the standard deviation of the difference between the realized return of the portolio and the realized return of the index.
Based on the segmented market hypothesis : Based on the segmented market hypothesis, the interest rate in each segment is determined by the supply and demand in the segment.
What is the convexity-what is price change due to convexity : What is the convexity? Also, if the interest rate increases from 4% to 5% , what is the price change due to the convexity?
Involved in investigation of its accounting practices : Locate a firm that has been involved in an investigation of its accounting practices by the SEC
The flotation cost adjusted initial outlay : how much stock would they have to sell if flotation costs are expected to be 15%? The flotation cost adjusted initial outlay.
The amount you will pay in interest over the life of loan : The number of years it will take to pay off the loan is years. The amount you will pay in interest over the life of the loan is $
Process innovation and service type businesses : How can we apply VA/VE to process innovation and service type businesses?
Compute the ratios and metrics : Compute the ratios and metrics given the following information on Hospital XYZ:
Working capital will revert back to normal at end of project : Working capital will revert back to normal at the end of the project. If the tax rate is 35% what is the irr for this project?

Reviews

Write a Review

Financial Management Questions & Answers

  Dividend yield and capital gains yield

Suppose a stock had an initial price of $82 per share, paid a dividend of $1.20 per share during the year, and had an ending share price of $90. What was the dividend yield and the capital gains yield? (Do not round intermediate calculations. Enter y..

  What is its default risk premium

The real risk-free rate, r*, is 2.3%. Inflation is expected to average 2.2% a year for the next 4 years, after which time inflation is expected to average 4.5% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yiel..

  Major issues it has on international trade negotiations

Discuss intellectual property and major issues it has on international trade negotiations. discuss potential comparability problems that exist in ratio analysis

  What is the bid-ask spread in dollars

A Treasury bond is quoted as 99:18 asked and 99:09 bid. What is the bid-ask spread in dollars on a $5,000 face value bond?

  What is the current value of the stock if dividends

Revarop, Inc., is a fast-growth company that is expected to grow at a rate of 23 percent for the next four years. It is then expected to grow at a constant rate of 6 percent. Revarop’s first dividend, of $4.45, will be paid in year 3. If the required..

  What is the yield to call of maturity bond

What is the yield to call of a 30-year to maturity bond that pays a coupon rate of 7.00 percent per year,

  Compute the no-arbitrage price of a treasury note

Suppose an investor would like to buy 200 Treasury notes. The investor wants notes with an annual coupon rate of 7%, a 3-year maturity, and semi-annual coupon payments. Assume each Treasury note has a par value of $1,000. Assuming the yield curve is ..

  Value of remaining equity after buyback

Global Works Inc.(GWI) is an all equity firm, currently worth $ 100 million. Costof equity capital is 20%. The CFO has pitched an exciting idea to the board. She astutelypoints out that GWI can borrow at a much lower rate than its cost of equity capi..

  Case study taco bell and how to build a business case

Case study "Taco Bell" and "How to Build a Business Case" Build a business case template

  Degree to which two variables move predictably

A measure of the degree to which two variables move predictably is known as

  The effect of inflation on risk-return relationship

Explain the effect of inflation on interest rates and the effect of inflation on risk-return relationship.

  Issues zero coupon bonds-yield to call

Atlantis Fisheries issues zero coupon bonds on the market at a price of $447 per bond. These are callable in 6 years at a call price of $520. Using semiannual compounding, what is the yield to call for these bonds?

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