West Wind, Inc. has 5,000,000 shares of common stock outstanding with a market value of $60 per share. Net income for the coming year is expected to be $6,900,000. What impact will a three-for-one stock split have on the earnings per share and on the price of the stock?
Answer to relevant QuestionsJersey Mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend. The stock is split two for one and a $3 per share cash dividend is declared. a. What will be the new price of the stock? b. If the firm’s ...A firm has the following balance sheet: a. Construct a new balance sheet showing the impact of a three-for-one split. If the current market price of the stock is $54, what is the price after the split? b. Construct a new ...The security market line is estimated to be k = 5% 1 110.4% - 5%2b. You are considering two stocks. The beta of A is 1.4. The firm offers a dividend yield during the year of 4 percent and a growth rate of 7 percent. The beta ...Your broker offers to sell for $1,200 a AAA-rated bond with a coupon rate of 10 percent and a maturity of eight years. Given that the interest rate on comparable debt is 8 percent, is your broker fairly pricing the bond? Given the following information concerning a convertible bond: • Principal: $1,000 • Coupon: 5 percent • Maturity: 15 years • Call price: $1,050 • Conversion price: $37 (i.e., 27 shares) • Market price of the ...
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