User Account

All Pages

What is the immediate dilution of the new share issue

Assignment Help Corporate Finance
Reference no: EM13204149

Dilution of earnings.Goodwood Golfing's earnings available for common shareholders (EAC) for this fiscal year is $6.5 million.  Goodwood has 5 million common shares outstanding.  The current share price is $24.  Good wood is considering issuing 500,000 common shares that will net the company 95 percent of the current share price when all issue costs are considered.

a. Prior to share issue, what isGoodwood's earnings per share (EPS)?

b. Assuming Goodwood issues the share this fiscal year, what is the immediate dilution of the new share issue?

c. Assume tha the proceeds from the share issue are invested and provide a 12 percent return that flows to EAC.  Is there a dilutive effect of the new share issue?

Reference no: EM13204149

Questions Cloud

At equilibrium payoffs to coke and pepsi respectively are : Refer to the table above where Coke's payoff is given as the first number in each cell. Suppose Coke and Pepsi are in a strategic environment in which each are deciding whether to manufacture either a big or small can of soft drink (they can't pro..
State a rectangular piece of cardboard is to be formed : When the sides are turned up to form the box, its volume is 765 cubic inches. Find the dimensions, in inches, of the original piece of cardboard.
State probability sampling and simple random sampling : What is the difference between probability sampling and simple random sampling?
Find in equilibrium for the car market own price elasticity : The supply curve for cars is given by the following: Qs = 2p-1000. Further the demand curve for cars is given by Qd = 8000 - p. In the equilibrium for the car market own price elasticity of demand (in absolute value terms) is equal to
What is the immediate dilution of the new share issue : Prior to share issue, what isGoodwood's earnings per share (EPS) and assuming Goodwood issues the share this fiscal year, what is the immediate dilution of the new share issue?
State string wound around a fixed circle is unwound : If a string wound around a fixed circle is unwound while held taut in the plane of the circle, its end P traces an involute of the circle. the circle in question is x^2+y^2=1 and the tracing point starts at (1,0).
Determine which scheme generates the highest profit : Suppose that the local gym has a marginal and average cost of 10 per visit. Calculate the profits associated with the following combinations of annual fee (T) and per visit fee (P), and determine which scheme generates the highest profit.
Determine the average velocity over the time interval : A particle moves along a number line such that its position s at any time t, t(greaterthan or equal to), is given by s(t)=2t^3-15t^2+24t+1. A) Find the average velocity over the time interval [1,2].
Determine how much do individual firms produce : Industry X has a market demand curve given by the equation P = 100 - Q/100, where P is the market price, and Q is industry-wide output.100 perfectly competitive firms currently operate in industry X. Each of these firms has a total cost function g..

Reviews

Write a Review

Corporate Finance Questions & Answers

  Purpose a statement of cash flows

Purpose a statement of cash flows for the year ended December 31, 2012 and what does this statement tell you that an income statement does not?

  Is garbage collection a public good

If it is a private good and not a public good, why is garbage collection so often provided directly by government and not the private sector?

  Calculate earnings per share and eps

Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued.  Also, calculate the percentage changes in EPS when the economy expands or enters a recession.

  Create journal entries to record transactions

A corporation's only treasury stock transactions for current year follow; 1,000 shares of its common stock were purchased on June 1st for $40,000 $40 each share.

  Evaluating financial statement data

Horizontal analysis is a technique for evaluating financial statement data and Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

  Determine stock based on firm''s dividend yield

Determine stock based on firm's dividend yield and capital gain yield - Evaluation of two different options for stock purchase.

  Initial cash flow for expansion project

Sailcloth & More currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion.

  Formulate a bip model in algebraic form

Formulate a BIP model in algebraic form for this problem and Formulate and solve this model on a spreadsheet.

  What is zylexs total interest expense per year

What dollar amount of interest per bond can an investor expect to receive each year from Zylex Corp and what is Zylex's total interest expense per year associated with this bond issue?

  Find the risk in junk bonds

Would you still planning investing in junk bonds from a new firm with a lot of potential is without a doubt a bad idea?. Thoughts?

  Pro forma analysis of cash flow

Revenue stream and diversify their business GEI expanded into the higher margin business of consumer products - discuss a number of proposals that looked promising. In order to smooth their revenue stream and diversify their business GEI expanded in..

  What is the importance of the acid-test ratio

Why is shareholders wealth maximization a better objective than maximizing earnings of earnings per share and what is the importance of the acid-test ratio

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd