Simpkins, Inc., is proposing a rights offering. Presently, there are 425,000 shares outstanding at $65 each. There
Question:
Simpkins, Inc., is proposing a rights offering. Presently, there are 425,000 shares outstanding at $65 each. There will be 90,000 new shares offered at $57 each.
a. What is the new market value of the company?
b. How many rights are associated with one of the new shares?
c. What is the ex-rights price?
d. What is the value of a right?
e. Why might a company have a rights offering rather than a general cash offer?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 57% (7 reviews)
a The new market value will be the current shares outstanding times the stock price ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Question Posted:
Students also viewed these Business questions
-
Rights Offerings Rebel, Inc. is proposing a rights offering. Presently there are 400,000 shares outstanding at $75 each. There will be 70,000 new shares offered at $70 each. a. What is the new market...
-
Bowman, Inc., is proposing a rights offering. Presently there are 400,000 shares outstanding at $73 each. There will be 50,000 new shares offered at $65 each. a. What is the new market value of the...
-
Hickock, Inc., is proposing a rights offering. Presently there are 350,000 shares outstanding at $64 each. There will be 50,000 new shares offered at $58 each. a. What is the new market value of the...
-
Through the use of strategic alternatives, companies may compete in a marketplace, achieve its vision, or if no vision has been articulated, decide where it might go and what it might achieve....
-
In a manufacturing plant, a work center is a specific production facility that consists of one or more people and/or machines and is treated as one unit for the purposes of capacity requirements for...
-
The financial statements of P&G are presented in Appendix B. The companys complete annual report, including the notes to the financial statements, is available online. Instructions Refer to P&Gs...
-
A double acting reciprocating pump delivering 80 litres per second has the following specifications : Diameter of piston = 300 mm; Stroke = 600 mm; Speed = 80 rpm; Suction head = 5 m; Delivery head =...
-
On December 1, delivery equipment was purchased for $7,200. The delivery equipment has an estimated useful life of four years (48 months) and no salvage value . Using the straight-line depreciation...
-
A disk of radius 3.00 m rotates like a merry-go-round as given by the function 0 = 2.00t4 + 6.00t, where is in radians and t is in seconds. What is the tangential acceleration (m/s) of a point on the...
-
Refer to Figure 10.45. A flexible circular area of radius 6 m is uniformly loaded by q = 450 kN/m2. Using Newmark's chart, determine the increase in vertical stress, z, at point A. Plan 4 450 kN/m2 6...
-
The Clifford Corporation has announced a rights offer to raise $50 million for a new journal, the Journal of Financial Excess. This journal will review potential articles after the author pays a...
-
DeAngelo Bank offers your firm a discount interest loan with an interest rate of 9.1 percent for up to $20 million, and in addition requires you to maintain a compensating balance of 4.5 percent...
-
1. Under what circumstances would it be wise for a bus company to put up fares when faced by falling numbers of passengers? Would deregulation make any difference to this decision? 2. Did the...
-
Write a program GamblerPlot that traces a gamblers ruin simulation by printing a line after each bet in which one asterisk corresponds to each dollar held by the gambler.
-
Uniform random numbers. Write a program that prints five uniform random numbers between 0 and 1, their average value, and their minimum and maximum values. Use Math.random(), Math.min(), and...
-
If change projects seem to stall and fail to progress, which of the eight steps of successful change have not received enough attention?
-
Write a program FunctionGrowth that prints a table of the values log n, n, n loge n, n 2 , n 3 , and 2 n for n = 16, 32, 64, ... , 2,048. Use tabs (\t characters) to align columns.
-
Day of the week. Write a program that takes a date as input and prints the day of the week that date falls on. Your program should accept three int commandline arguments: m (month), d (day), and y...
-
Pop Corporation has $8,000,000 of 12 percent bonds outstanding on December 31, 2016, with unamortized premium of $240,000. These bonds pay interest semiannually on July 1 and January 1 and mature on...
-
Borrowing costs should be recognised as an expense and charged to the profit and loss account of the period in which they are incurred : A. If the borrowing costs relate to qualifying asset B. If the...
-
What is the price of a 15-year, zero coupon bond paying $1,000 at maturity, assuming semiannual compounding, if the YTM is: a. 6 percent? b. 8 percent? c. 10 percent?
-
If Treasury bills are currently paying 3.9 percent and the inflation rate is 2.1 percent, what is the approximate real rate of interest? The exact real rate?
-
Suppose the real rate is 2.4 percent and the inflation rate is 3.7 percent. What rate would you expect to see on a Treasury bill?
-
Johnny's Lawn Service camed $200,000 of service revenues for 2020. $190,000 was collected in cash and $10,000 remains in Accounts Receivable as of 12/31/20. S155,000 of expense was incurred during...
-
Company BW has $500,000 loan outstanding. The annual loan interest rate is 6% with monthly compounding (meaning BW is making monthly payments). Find the annual after-tax cost of debt for the loan.
-
The hierarchical system of classification is intended to be a map of evolution. Explain this statement. What is implied about species that occur on the same branch of a phylogenetic tree?
Study smarter with the SolutionInn App