104.
Buchanan Corp. is refunding $9 million worth of 12% debt. Thenew bonds will be issued for 7%. The corporation's tax rate is 31%.The call premium is 8%. What is the net cost of the callpremium?
102.
101.
Assume, in assessing the initial P/E ratio, the investmentbanker will first determine the appropriate industry P/E based onthe Standard & Poorâs 500 Index. Then a .50 point will be addedto the P/E ratio for each case in which Richmond Rent-A-Car issuperior to the industry norm, and a .50 point will be deducted foran inferior comparison.
On this basis, what should the initial P/E be for the firm?(Round your answer to 1 decimal place.)
99.
Firm X needs to net $8,000,000 from the sale of common stock.Its investment banker has informed the firm that the retail pricewill be $24 per share, and that the firm will receive $21.00 pershare. Out-of-pocket costs are $600,000. How many shares must besold?
98.
Raybac is about to go public. Its present stockholders own580,000 shares. The new public issue will represent 810,000 shares.The shares will be priced at $55 to the public with a 16% spread.The out-of pocket costs will be $570,000. What are the net proceedsto the firm?
The investment banking firm of Einstein & Co. will use adividend valuation model to appraise the shares of the ModernPhysics Corporation. Dividends (D1) at the endof the current year will be $1.54. The growth rate (g) is9 percent and the discount rate (Ke)is 13 percent.
a. What should be the price of the stock to thepublic? (Do not round intermediate calculations and roundyour answer to 2 decimal places.)
b. If there is a 5 percent total underwritingspread on the stock, how much will the issuing corporation receive?(Do not round intermediate calculations and round youranswer to 2 decimal places.)
c. If the issuing corporation requires a netprice of $37.00 (proceeds to the corporation) and there is a 5percent underwriting spread, what should be the price of the stockto the public? (Do not round intermediate calculations andround your answer to 2 decimal places.)
104.
Buchanan Corp. is refunding $9 million worth of 12% debt. Thenew bonds will be issued for 7%. The corporation's tax rate is 31%.The call premium is 8%. What is the net cost of the callpremium? |
102.
101.
Assume, in assessing the initial P/E ratio, the investmentbanker will first determine the appropriate industry P/E based onthe Standard & Poorâs 500 Index. Then a .50 point will be addedto the P/E ratio for each case in which Richmond Rent-A-Car issuperior to the industry norm, and a .50 point will be deducted foran inferior comparison.
On this basis, what should the initial P/E be for the firm?(Round your answer to 1 decimal place.)
99.
Firm X needs to net $8,000,000 from the sale of common stock.Its investment banker has informed the firm that the retail pricewill be $24 per share, and that the firm will receive $21.00 pershare. Out-of-pocket costs are $600,000. How many shares must besold? |
98.
| Raybac is about to go public. Its present stockholders own580,000 shares. The new public issue will represent 810,000 shares.The shares will be priced at $55 to the public with a 16% spread.The out-of pocket costs will be $570,000. What are the net proceedsto the firm? The investment banking firm of Einstein & Co. will use adividend valuation model to appraise the shares of the ModernPhysics Corporation. Dividends (D1) at the endof the current year will be $1.54. The growth rate (g) is9 percent and the discount rate (Ke)is 13 percent. b. If there is a 5 percent total underwritingspread on the stock, how much will the issuing corporation receive?(Do not round intermediate calculations and round youranswer to 2 decimal places.) c. If the issuing corporation requires a netprice of $37.00 (proceeds to the corporation) and there is a 5percent underwriting spread, what should be the price of the stockto the public? (Do not round intermediate calculations andround your answer to 2 decimal places.) |
