What is the immediate dilution based on new corporate shares

Assignment Help Finance Basics

Reference no: EM131787797

Question: 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 in 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: EM131787797

Questions Cloud

Level of situational control in these circumstances : According to Fiedler’s contingency model, how would you characterize the level of situational control in these circumstances?

Essentials of strategic management : Discuss specifically using the concepts discussed in the chapter, the basis for this competitive advantage Anheuser Busch has.

What is the immediate dilution potential for new stock issue : American Health Systems currently has 6,000,000 shares of stock outstanding and will report earnings of $15 million in the current year.

An examination consists of 12 questions : An examination consists of 12 questions. If 10 questions must be answered, find the number of different orders in which a student can answer the questions.

What is the immediate dilution based on new corporate shares : 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.

What is the break-even point in units for each product : What is the break-even point in units for each product

Describe several potential financial benefits : One of the world's fastest growing biotechnology firms. Describe several potential financial benefits that could result from providing this system.

Identified 4 kinds of small molecules : Biologists have identified 4 kinds of small molecules: adenine, cytosine, quanine, and thymine, which link together to form larger molecules in genes.

Discuss the analyzing or designing e-business scenarios : Discuss the tension field between separation and integration of concerns when analyzing or designing e-Business scenarios.

User Account

All Pages