What is the maximum number of new shares of common stock

Assignment Help Financial Management

Reference no: EM13731923

Aspin Corporation’s charter authorizes issuance of 2,900,000 shares of common stock. Currently, 1,200,000 shares are outstanding, and 400,000 shares are being held as treasury stock. The firm wishes to raise $104,500,000 for a 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 from shareholders?

b. Judging on the basis of the data given and your finding 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: EM13731923

Questions Cloud

What is the current yield on the bonds : The Firm, Inc. has 8.6% coupon bonds on the market with eight years to maturity. The bonds make semi-annual payments and currently sell for 107.4 percent of par. What is the current yield on the bonds?

What is the total cost for one contract : What is the total cost for one contract? Suppose you purchase the June 2011 put option on orange juice futures with a strike price of $1.75. How much does your option cost per pound of orange juice? What is the total cost for one contract?

What is your forecast for the current value of share : Pythagoras Jones is a prominent Wall Street analyst. Jones recently announced that he expects Right Triangle Design (RTD) to pay dividends of $5, $12, and $13 over the next 3 years. After that he forecasts 4% growth in perpetuity for RTD. If the appr..

What is the current value of one share of stock : The Young Han Consulting Group (YHCG) is expanding into a new line of business. Aa result the company plans to increase its annual dividend by 12 percent a year for the next three years and then decreasing the growth rate to 3 percent per year. YHCG ..

What is the maximum number of new shares of common stock : Aspin Corporation’s charter authorizes issuance of 2,900,000 shares of common stock. Currently, 1,200,000 shares are outstanding, and 400,000 shares are being held as treasury stock. The firm wishes to raise $104,500,000 for a plant expansion.

What is the current value of a share of stock : Squidward Tentacles & Co. will pay an annual dividend of $0.65 one year from now. The dividend is expected to grow at a 12% rate for the next 4 years and then settle down to a steady growth rate of 2% per year in perpetuity. If Squidward Tentacle’s r..

What is the current selling price : A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)? Worked this many ways by many suggestions and I am not ..

What should the value of equity be : Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow so $84000 if demand is as expected. The cost of debt is 4%. What should the value of equity be?

About pricing through a channel of distribution : This problem is about pricing through a channel of distribution. The product is shoes. The total landed cost to the importer is $20 for a pair of shoes (to their warehouse from any manufacturer around the globe).

User Account

All Pages