ADMS 3541 Lecture Notes - Lecture 18: Price Discovery, Nasdaq, Financial Statement

14 views2 pages

byzantiumcat166

2 Mar 2020

School

York University

Department

Administrative Studies

Course

ADMS 3541

Professor

Alan Go

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

To facilitate this process, a company needs a marketplace where these shares can be sold. This marketplace is provided by the stock market. If everything goes as per the plans, the company will successfully sell the 5 million shares at a price of per share and collect million worth of funds. Investors will get the company shares which they can expect to hold for their preferred duration, in anticipation of rising in share price and any potential income in the form of dividend payments. The stock exchange acts as a facilitator for this capital raising process and receives a fee for its services from the company and its financial partners. Following the first-time share issuance ipo exercise called the listing process, the stock exchange also serves as the trading platform that facilitates regular buying and selling of the listed shares.

Related Questions

UBL Financial Group provides personal and commercial banking, wealth management services, insurance, and corporate and investment banking. On March 3, 2017, the company announced that its board of directors had declared a stock dividend, which has the same effect as a two-for-one split of its common shares. The board of directors also declared a quarterly common share cash dividend of $0.52 per share, which represents $0.26 per share on a post-stock dividend basis. This dividend of $0.26 per share, as well as the stock dividend, are payable on May 24, 2017, to common shareholders of record on April 25, 2017.

Required: 1. Prepare any journal entries that UBC Financial should make as the result of information in the preceding report. Assume that the company has 1.3 million shares outstanding with a market value of $13.25 per share and an average issue price of $5.60

1. Record declaration of stock dividend

2. Record declaration of cash dividend

3. Recod issuance of shares to current shareholders as common stock dividend

4. Recod payment of cash dividend

cyaneel950

MuleSoft, Inc. conducted its IP on March 17, 2017 for theprinciple purposes of increasing its capitalization and financialflexibility, creating a public market for its Class A common stock,and enabling access to the public equity markets for it and itsstockholders. MuleSoft sold 13 million shares for an IPO offer of$17 per share. The underwriting discoung was $1.19 per share.MuleSoft intends to use the net proceeds from the offering to thefirm for general corporate purposes, such as working capital,operating expenses, capital expenditures, and to possibly acquirecomplementary businesses, products, services or technologies.MuleSoft's closing stock price was $24.75 after the first day oftrading on the NYSE and there were 125,991,557 shares of stockoutstanding.

Create a spreadsheet to conduct an analysis of MuleSoft's IPOand determine the following:

a) Calculate the total proceeds for MuleSoft's IPO.

b) Calculate the percentage underwriter discount for MuleSoft'sIPO.

c) Calculate the dollar amount of the underwriting fee forMuleSoft's IPO.

d) calculate the net proceeds for MuleSoft's IPO.

e) Calculate the percentage IPO underpricing for MuleSoft'sIPO.

f) Calculate the market capitalization for MuleSoft's IPO afterthe first day of trading in the secondary market.

chocolategoose86

GBE Inc. is analyzing the possible acquisition of AWA Media Inc. Neither company has debt. The financial analyst of GBE has collected the following information:
GBE
AWA
Pre-merger stock price
$42
$20
Number of shares outstanding
12 million
8 million
GBE and AWA have agreed on a transaction value of $24 per share for AWAâs stock, but are negotiating methods of payment: an all-cash offer, and a stock exchange offer. GBE estimates the acquisition will increase its total after-tax annual cash flows by $7.6 million indefinitely. The appropriate discount rate for the incremental cash flows is 10 percent.
a. What is the synergy from the acquisition? Calculate the takeover premium of each alternative. (9 marks)
b. Calculate the NPV of each alternative. (2 marks)
c. Assume the synergy is re-estimated to be $80million based on the recent market information. What is the maximum cash price per share that could be paid for AWA? (2 marks)
d. Assume the synergy remains to be $80million. Calculate the takeover premium for a cash and stock exchange offer ($6.5 cash per share of AWA plus 0.35 shares of GBE per share of AWA). (4 marks)
e. Name and describe two pre-offer and two post-offer defensive tactics. (3 marks)

peachhedgehog469

ADMS 3541 Lecture Notes - Lecture 18: Price Discovery, Nasdaq, Financial Statement

Document Summary

Get access

Related Documents

ADMS 3541 Lecture Notes - Lecture 25: Initial Public Offering, Otc Bulletin Board, Open Outcry

ADMS 3541 Lecture Notes - Lecture 20: Market Maker, Capital Formation, Block Chain

ADMS 3541 Lecture Notes - Lecture 17: New York Stock Exchange, Chicago Board Options Exchange, Nasdaq

Related Questions