Question: ** ****Please do not copy and paste. I want a unique answer ****Please use the keyboard to answer and write the number of questions Fin
** ****Please do not copy and paste. I want a unique answer
****Please use the keyboard to answer and write the number of questions
Fin 201
Q1:An investor owns a bond selling for $5,000. This bond can be converted into 50 shares of stock that are currently selling for $82 per share. Should the investor convert his bond into shares? Explain why? (please i need new and perfect answer) [2 Mark]
Q2: What is the Expected return on the assets (Cost of capital ) of a firm with following data. [2 Marks] (please i need new and perfect answer)
| Assets Value | 100 | Debt (D) | 40 |
| - | - | Equity (E) | 60 |
| Total Asset value | 100 | Firm Value | 100 |
Expected Return on the debt (rdebt) = 8%
Expected Return on the Equity (requity) = 16%
Q3. How much will a firm receive in net funding from a firm commitment underwriting of 300,000 shares priced to the public at $30 if a 10% underwriting spread has been added to the price paid by the underwriter? Additionally, the firm pays $600,000 in legal fees. [2 Marks]
(please i need new and perfect answer)
Q4. Explain the concept of Financial Distress and Financial Slack. Also write the benefits and drawbacks of Financial Slack. [2 Mark]
(please i need new and perfect answer)
Q5. What is Underwriter Spread? Explain with example. Write down the steps followed in an IPO Flowchart. [2 Marks]
(please i need new and perfect answer)
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