Calculate the payoff of fully exercising warrants given the following: 900,000 existing shares are outstanding (n); 100,000 warrants (m) are outstanding and are exercisable at $10 (X). The firm is valued at $10 million (V) before the warrants are exercised. Calculate the payoff to warrant holders and the dilution factor.
Answer to relevant QuestionsOrion’s Belt Mining Co. has 12 million common shares outstanding, which are currently trading for $4.75 apiece. In addition, the company has issued three million share purchase warrants with a strike price of $4.00 that ...A firm has just issued convertible preferred shares with a $50 par value. The conversion price for these shares is $12.50 (per common share). What is the conversion ratio?A firm's market values of equity and debt are $750,000 and $250,000, respectively. The before tax cost of debt = 6%; RF = 4%; beta (β) = 0.8; the market risk premium = 10%; and the tax rate = 20%. Calculate the WACC ...A firm has the following capital structure based on market values: equity 65 percent and debt 35 percent. The current yield on government T-bills is 2 percent, the expected return on the market portfolio is 10 percent, and ...Calculate the cost of issuing new equity for a firm, assuming issue costs are 3 percent of the share price after taxes; market price per share = $40; current dividend = $2.75; and the constant growth rate in dividends is 5 ...
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