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c) Pine Company Ltd is planning to market a new produce, New P. To finance the...
Pine Company Ltd. is planning to market a new product, Pinew. To finance the venture, it...
Pine Company Ltd. is planning to market a new product, Pinew. To finance the venture, it proposes to have a rights issue at Shs 40/= of one new share for each two shares held. The company currently has 2,000,000 shares outstanding with a market price of Shs 150/= per share. Assume that the new funds are invested to earn the same rate of return as Pine's other assets. Required: i. Share price after 100% subscription of the issue. (6 marks)...
Pine Company Ltd. is planning to market a new product, Pinew. To finance the venture, it...
Pine Company Ltd. is planning to market a new product, Pinew. To finance the venture, it proposes to have a rights issue at Shs 40/= of one new share for each two shares held. The company currently has 2,000,000 shares outstanding with a market price of Shs 150/= per share. Assume that the new funds are invested to earn the same rate of return as Pine’s other assets. Required: i. Share price after 100% subscription of the issue. (6 marks) ii. Value...
3. QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes...
3. QRS N-Queries Company has an exciting new project that will cost $10,000,000. The company proposes to finance this project by issuing new shares with a rights offering. Currently, the company has 2,000,000 shares outstanding, each valued in the financial market at $30. With the rights offering, shareholders will be able to purchase one new share for a subscription price of $10. (6 marks) What is the rights-on price for each share, M0? (1 mark) How many new...
A company with 2 million shares of common stock currently outstanding is planning to sell 500,000...
A company with 2 million shares of common stock currently outstanding is planning to sell 500,000 new shares to its existing shareholders through a rights issue. The current market price of a share is $65, and the subscription price is $55. If the stock is selling rights-on, calculate the number of rights needed to purchase one of the new shares of common stock and the value of each right. a. Calculate the number of rights needed to buy one share...
The directors of Siedu Ltd. have recently announced a record increase in payment for the half-yea...
The directors of Siedu Ltd. have recently announced a record increase in payment for the half-year ended 30th September 2005. On announcement date, the company’s equity share price was ¢3000, its highest level for many months, giving it an equity market capitalization of approximately ¢480 billion. On the same day as the profits announcement, the directors declared their intention of raising funds via a rights issue in order to finance a major expansion in Siedu Ltd’s overseas operations. Their aim...
Kilifi Ltd has 3.2 million shares and issue. The market price per share is sh. 75....
Kilifi Ltd has 3.2 million shares and issue. The market price per share is sh. 75. The management of the company is contemplating raising an additional sh. 120 million through a rights issue in order to fund a new project. The right issue would be made at a discount of 20% of the current market price. Required The number of shares to be issued in the rights issue (2 marks) The theoretical ex-right price- the value of a right (5...
Knoll Consulting wants to raise $20,000,000 to expand their operations. The company is going to issue...
Knoll Consulting wants to raise $20,000,000 to expand their operations. The company is going to issue 250,000 new shares through a rights offering with a subscription price of $80.00. Knoll currently has 500,000 shares outstanding at a price of $130.00 per share. What will the new market value of the company be? How many rights will be needed to buy one new share? What will the ex-rights price be? What is the value of a right?
Phone Company Inc. makes a rights issue at a subscription price of $7 a share. One...
Phone Company Inc. makes a rights issue at a subscription price of $7 a share. One new share can be purchased for every five shares held. Before the issue there were 20 million shares outstanding what is the total amount of new money raised? $20 million
A company is planning a new plant and needs to raise (net of underwriting cost) $18.6 million to finance it. The company...
A company is planning a new plant and needs to raise (net of underwriting cost) $18.6 million to finance it. The company plans to raise the money through a general cash offering priced at an offer price of $4 a share. The underwriters charge a 7 per cent spread. How many shares does the company have to sell to achieve its goal (in millions to three decimal places)? (Hint: required amount/(1-spread) = issue amount) Select one: a. 5.000 b. 21.505...
Digger Mining Inc. needs to raise $1.2 bil to finance the development of its new copper...
Digger Mining Inc. needs to raise $1.2 bil to finance the development of its new copper mine which it plans to obtain via a rights offering. Existing shareholders were offered the right to buy 3 new shares of Digger for every 20 shares held. The new shares were priced at $13.93 per share – about 44% below Digger’s preannouncement price of $24.73. Assume you owned 20 shares of Digger prior to the rights announcement. (PLEASE TYPE ANSWERS) What is the...
Pine Company Ltd. is planning to market a new product, Pinew. To finance the venture, it proposes to have a rights issue at Shs 40/= of one new share for each two shares held. The company currently has 2,000,000 shares outstanding with a market price of Shs 150/= per share. Assume that the new funds are invested to earn the same rate of return as Pine's other assets. Required: i. Share price after 100% subscription of the issue. (6 marks)...
Knoll Consulting wants to raise $20,000,000 to expand their operations. The company is going to issue 250,000 new shares through a rights offering with a subscription price of $80.00. Knoll currently has 500,000 shares outstanding at a price of $130.00 per share. What will the new market value of the company be? How many rights will be needed to buy one new share? What will the ex-rights price be? What is the value of a right?
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