Business, 06.08.2019 17:10 pearfam98

Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. the firm announces a plan to sell an additional 1 million shares through a rights offering. the market value of the stock is $ 35 before the rights offering and the new shares are being offered to existing shareholders at a $ 5 discount. a. if you exercise your preemptive rights, how many of the new shares can you purchase? 20,000 50,000/2,500,000=.02=2% 2% 1,000,000= 20,000 b. what is the market value of the firm after the rights offering? $3.57 a share 2,500,00035 a share+1,000,000*30 a share= 117.5 million 117.5 million/ 3.5 million = 33.57 a share 33.57-30= 3.57 a share c. what is your total investment in the firm after the rights offering? how is your investment split between original shares and new shares? d. if you decide not to exercise your preemptive rights rather sell your rights, what is your investment in the firm after the rights offering? how is this split between old shares and rights?

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 08:30

Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk

Answers: 3

Answer

Business, 22.06.2019 09:50

Acar manufacturer uses new machines that automatically assemble an engine from parts fed to the system. the machine can regulate the speed ofassembly depending on the number of parts produced. which type of technology does this machine use? angenoem mense wat ons in matin en esta va ser elthe machine uses

Answers: 3

Answer

Business, 22.06.2019 11:10

The prebisch–singer hypothesis concludes that: a. technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade. b. developing countries experience a long-run decline in their terms of trade, as the demand for primary products in higher-income countries declines relative to their demand for manufactured goods. c. because of unfair trading practices, labor in developing countries is exploited. d. opec has been responsible for a slowdown in the world's standard of living.

Answers: 3

Answer

Business, 22.06.2019 20:00

Afirm is producing at minimum average total cost with its current plant. draw the firm's long-run average cost curve. label it. draw a point on the lrac curve at which the firm cannot lower its average total cost. draw the firm's short-run average total cost curve that is consistent with the point you have drawn. label it.g

Answers: 2

Answer

You know the right answer?

Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. t...

Questions

Business, 15.04.2020 17:44

Amb quina finalitat l’empresa manté inventaris de matèries primeres i productes acabats?...

Business, 15.04.2020 17:44

Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $ 2.75 millio...