Excel Solutions - Chapter 16

Excel Solutions - Chapter 16 - Chapter 16 Problems 1-15...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 16 Problems 1-15 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green Chapter 16 Question 1 Input Area: Shares outstanding 350,000 Price $85.00 New shares 70,000 New price $70.00 Output Area: a. New market value $34,650,000 b. Number of rights needed 5.00 c. P(x) $82.50 d. Value of a right $2.50 e. A rights offering usually costs less, it protects the proportionate interests of existing share- holders, and protects against underpricing. Chapter 16 Question 2 Input Area: Amount raised $50,000,000 Shares outstanding 5,200,000 Price $40 New price $35 Shareholder 1,000 Output Area: a. Maximum subscription price = current share price $40 Minimum is anything > 0 b. Number of new shares 1,428,571 Number of rights needed 3.64 c. P(X) $38.92 Value of a right $1.08 d. Before offer: $40,000 After offer: $40,000 Chapter 16 Question 3 Input Area: Ex-rights price $80 Rights-on price $74.50 Funds needed $15,000,000 Price $40 Output Area: P(x) $6.273 Number of new shares 375,000 Number of old shares 2,352,273 Chapter 16 Question 4 Input Area: Undervalued IPO $11 Overvalued IPO $6 Price $40 # of shares 1,000 1/2 # of shares 500 Output Area: If you receive 1000 shares each, the profit is: $5,000 Expected profit $(500) This is an example of the winner's curse. Chapter 16...
View Full Document

Page1 / 16

Excel Solutions - Chapter 16 - Chapter 16 Problems 1-15...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online