Company A's market share price is EUR 55 per share. Company A has the following balance...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Company A's market share price is EUR 55 per share. Company "A" has the following balance sheet: Assets: EUR 500,000,000 Capital: EUR 100,000,000 (10,000,000 shares, Nominal Value = EUR 10) Retained Earnings: EUR 300,000,000 Debt: EUR 100,000,000. In the case of a capital increase of 2,000,000 shares at the issue price of the new shares of EUR 52 per share, you have to determine what would be, after the increase, the company's balance sheet, the book value of the company, the book value of the share, the market capitalisation of the company and the change in the value of the investment of a shareholder who held 3,000 shares and who does not take part in the capital increase. Note: Assume that the firm's future expectations are held fixed. Company A's market share price is EUR 55 per share. Company "A" has the following balance sheet: Assets: EUR 500,000,000 Capital: EUR 100,000,000 (10,000,000 shares, Nominal Value = EUR 10) Retained Earnings: EUR 300,000,000 Debt: EUR 100,000,000. In the case of a capital increase of 2,000,000 shares at the issue price of the new shares of EUR 52 per share, you have to determine what would be, after the increase, the company's balance sheet, the book value of the company, the book value of the share, the market capitalisation of the company and the change in the value of the investment of a shareholder who held 3,000 shares and who does not take part in the capital increase. Note: Assume that the firm's future expectations are held fixed.
Expert Answer:
Related Book For
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date:
Students also viewed these accounting questions
-
A firm has the following balance sheet and income statement (in millions of dollars): The long-term debt is 8 percent coupon debt maturing in five years. The statutory tax rate is 38 percent. Prepare...
-
The Southwick Company has the following balance sheet ($000): Financial Ratios Current ratio ........ 1.92 Quick ratio ....... 1.08 Debt-to-equity ratio ...... 0.79 Evaluate the impact of each of the...
-
The bookkeeper for Geronimo Company has prepared the following balance sheet as of July 31, 2014. The following additional information is provided. 1. Cash includes $1,200 in a petty cash fund and...
-
Starting on January 1, 2024, you put $125 every month into an account with an APR of 4.10%. Your last payment is on December 1, 2032. On January 1 of that year, the balance in the account, rounded to...
-
Bridgeport Hospital and Health Care Services (BHHS) in Bridgeport, Connecticut, is a part of the Yale University Health System. BHHS is a 450-bed community-teaching hospital with the following...
-
The requirement that purchases be made from suppliers on an approved vendor list is an example of a: a. Preventive control. b. Detective control. c. Compensating control. d. Monitoring control.
-
Draw energy diagrams for the processes of separating charge carriers by (a) rubbing, (b) increasing the separation distance between a positively charged object and a negatively charged object, and...
-
Konerko Industries had the following transactions. 1. Borrowed $5,000 from the bank by signing a note. 2. Paid $2,500 cash for a computer. 3. Purchased $700 of supplies on account. Instructions (a)...
-
a) Explain the following principles of valuation i. Principle of conformity ii. Principle of substitution iii. Principle of highest and best use iv. Principle of supply and demand v. Principle of...
-
Clean Duds Laundromat has an industrial water softener that enhances the water quality used in its washing machines. The water softener is approaching the end of its useful life and must be either...
-
Which of the following statements is false? A) Because value is lost when a resource is used by another project, we should include the opportunity cost as an incremental cost of the project. B) Sunk...
-
If requirements are frequently changing, which of the following models is to be selected? (a) Waterfall model (b) Prototyping model (c) RAD model (d) Agile mode
-
If requirements are easily understandable and defined, which of the following models is best suited? (a) Waterfall model (b) Prototyping model (c) Spiral model (d) None of these
-
Which of the following are new introductions in UML 2? (a) Guards (b) Combined fragments (c) Interaction Occurrences (d) Frames
-
Waterfall model is not suitable for (a) Small projects (b) Accommodating change (c) Complex projects (d) None of these
-
Actor Bank has an association with use case Withdraw with multiplicity 0..*. This means that Bank is involved with multiple Withdraw operations (a) sequentially (b) parallely (c) either (d) neither
-
The function C(t) = Co(1 + r)' models the rise in the cost of a product that has a cost of Co today, subject to an average yearly inflation rate of r for r years. If the average annual rate of...
-
The purpose of this case is to come up with a contingency plan[s] in order to sustain the program Move With Me, a program that serves thousands of community members throughout Lower Manhattan. The...
-
Taxable income and income tax rates for 20062008 for the company have been as follows: Make the journal entry necessary to record any net operating loss (NOL) carryback in2008. Total Tax Paid $12,000...
-
M. Taylor has been employed as a bookkeeper at Losser Corporation for a number of years. With the assistance of a clerk, Taylor handles all accounting duties, including the preparation of financial...
-
In August 1990, Iraq invaded Kuwait. For gasoline distributors, this meant that the price they paid for oil in the future could increase dramatically. For consumers, the effect was more immediate....
-
Which of the following statements regarding the calculation of the enterprise value multiple is most likely correct? A. Operating income may be used instead of EBITDA. B. EBITDA may not be used if...
-
Enterprise value is most often determined as market capitalization of common equity and preferred stock minus the value of cash equivalents plus the: A. Book value of debt. B. Market value of debt....
-
An analyst has determined that the appropriate EV/EBITDA for Rainbow Company is 10.2. The analyst has also collected the following forecasted information for Rainbow Company: EBITDA = \($22\),000,000...
Study smarter with the SolutionInn App