hw16 - 22.75=7.25n N=3.14 15M/40=375,000...

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1) a) value of the company => 400,000(75)+70,000*70=34,900,000 b) 400,000/70000= 5.71 c) 34,900,000/(400K+70K)=$74.26 d) 75-74.26= .75 2) a) Max. current stock price 60. Min anything greator than 0 b) 50M/55=909,091 old/new shares = 5.2/909,091=5.72 c) 5.2M*60+50M=362,000,000 362,000,000/909,091+5.2M = 59.26 Value of right = 60 - 59.26 = .74 d) portfolio = 1000*60= 60,000 1000(59.26) + 1000(.74) = 60000 3) 62.75 = [N(70) + 40]/(N+1) 62.75n + 62.75-40=70n
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Unformatted text preview: 22.75=7.25n N=3.14 15M/40=375,000 375,000*3.14=1,177,500 4) If get all bids then 1000(8)-1000(5) = 3000 Expect when rationed then only 500 will be filled => 500(8)-1000(5) =-1000 5) 40m/1-.08) = 43,478,261 43,478,261/35 =1,242,236 6) 40,900,000/1-.08 =>44,456,521 44,456,521/35=>1,270,186 7) 8) # of rights needed 100,000/20,000=>5rights ; 5(80) + 80/6 =80 ; 5(80) + 75/6 =79.17 ; 5(80) + 70/6 = 78.333...
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This note was uploaded on 05/25/2008 for the course FRL 301 taught by Professor Carney during the Spring '08 term at Cal Poly Pomona.

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