The target investors of the new issuance of the 800,000 P1,000-par value shares expect a return...

Transcribed Image Text:

The target investors of the new issuance of the 800,000 P1,000-par value shares expect a return of 16% and a zero growth rate. If the management quantifies this return as P140 per share, what should the target issue price per share be? ABC operates 250 days in a year and sells an average of 500 units each day. On better days, sales may reach 800 units. The supplier delivers the inventory within 3 to 6 days after receiving the purchase orders from ABC but the average time is 4 days. Assuming normal operations, what would the expected minimum inventory level be for ABC? The target investors of the new issuance of the 800,000 P1,000-par value shares expect a return of 16% and a zero growth rate. If the management quantifies this return as P140 per share, what should the target issue price per share be? ABC operates 250 days in a year and sells an average of 500 units each day. On better days, sales may reach 800 units. The supplier delivers the inventory within 3 to 6 days after receiving the purchase orders from ABC but the average time is 4 days. Assuming normal operations, what would the expected minimum inventory level be for ABC?

Answer rating: 100% (QA)

1Find the target issue price per share Where P0 is the target iss... View the full answer