What is maximum number of new shares of common stock

Assignment Help Financial Management

Reference no: EM131300104

Aspin Corporation’s charter authorizes issuance of 2,100,000 shares of common stock. Currently, 1,400,000 shares are outstanding, and 300,000 shares are being held as treasury stock. The firm wishes to raise $44,000,000 for plant expansion. Discussions with its investment bankers indicate that the sale of new common stock will net the firm $55 per share.

a. What is the maximum number of new shares of common stock that the firm can sell without receiving further? authorization?

b. Judging on the basis of the data given and your finding in part a in part a, will the firm be able to raise the needed funds without receiving further? authorization?

c. What must the firm do to obtain authorization to issue more than the number of shares found in part a?

Reference no: EM131300104

Questions Cloud

Assume that the investors required rate of return from bond : What is the yield-to-maturity of a 10-year maturity and $1,000 par value bond with an 8% coupon interest rate if it is selling for $950.08? Assume that interest is paid annually. What is the market value of a 15-year maturity and $1,000 par value bon..

The bonds market price when interest rates change : What is the yield-to-maturity of a 10-year maturity and $1,000 par value bond with an 8% coupon interest rate if it is selling for $950.08? Assume that interest is paid annually. The shorter the time remaining to maturity, the stronger will be the vo..

Use of discretionary sources of financing : Tulley Appliances Inc. projects next year's sales to be $21.25 million. Current sales are $17 million, based on current assets of $5.67 million and fixed assets of $8.50 million. Based on your projections, and assuming that the $200,000 expansion in ..

Use easy method to estimate family life insurance needs : Mark and Parveen are the parents of three young children. Mark is a store manager in a local supermarket. His gross salary is $74200 per year. Parveen is a full-time stay-at-home mom. Use the easy method to estimate the family’s life insurance needs.

What is maximum number of new shares of common stock : Aspin Corporation’s charter authorizes issuance of 2,100,000 shares of common stock. Currently, 1,400,000 shares are outstanding, and 300,000 shares are being held as treasury stock. The firm wishes to raise $44,000,000 for plant expansion. What is t..

What is approximate and the exact real rate of interest : If Treasury bills are currently paying 6.25 percent and the inflation rate is 1.8 percent, what is the approximate and the exact real rate of interest?

Compute the earnings per share for the three strategies : Company XYZ has $120 million of assets, 100% financed with equity, and that the firm has 6 million shares of stock outstanding valued at $20 per share. Suppose company XYZ has operating earnings of $27 million. Compute the earnings per share for the ..

Determine the accumulated value of fund : $2000 is deposited into Fund X at the beginning of each year for 10 years, which earns an annual effective rete of 5%. At the end of each of the first 10 years, Determine the accumulated value of Fund Y at the end of year 20.

What is the exact real rate : Treasury bills are currently paying 6 percent and the inflation rate is 2.6 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact r..

User Account

All Pages