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Fomular and Solution - Chap 8

Fomular and Solution - Chap 8 - After new issuance of stock...

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A. Formula: 1. Return on stock: = R P - + PoPo DPo P: current price P o : initial price 2. Cumulative voting The number of shares needed to elect p directors, N p , is: = × Np P Number of s h + + are outstandingTotal Number of director 1 1 3. Market Index Price-Weighted average = = / PWI i 1nPit Divisor Value-Weighted average = = ( × )/ VWI i 1n Pit number of share outstanding Divisor Pit: Price of stock in day t n: Number of stock 4. Value of stock = ( + ) + ( + ) +…+ ∞( + )∞ P D1 1 i 1 D2 1 i 2 D 1 i B. Solution: Question 5: a. The number of shares needed to elect 5 Seats, N 5 , is: = × + + = Np 5 15M6 1 1 10714287 b. Under straight voting, minimum number of votes equal to over half of total outstanding share. It means: Np 7500001 Question 8: a. Your initial proportion: 50k/2.5M = 2% After new issuance of stock, total outstanding share = 2.5 + 1 = 3.5 M

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Unformatted text preview: After new issuance of stock, total outstanding share = 2.5 + 1 = 3.5 M Under preemptive right, your proportion will not change, thus your current number of shares: 3.5 * 2% = 70K. Therefore, you can purchase: 70 – 50 = 20k (stock) b. Value of total share before issuance: 35*2.5M = 87.5M Value of new share: 30*1M = 30M Total value after issuance: 87.5 + 30 = 117.5M New market value of share: 117.5/3.5M = 33.57\$ c. Your total investment = 50k*35 + 30*20k = 33.57*70k = 2350000\$ Question 13: Price at Price at beginning end of => Stock of year Dividends year Return \$50.00 \$ 4.50 \$40.00 =-11.00% \$50.00 \$ 4.50 \$48.00 = 5.00% \$50.00 \$ 4.50 \$50.00 = 9.00% \$50.00 \$ 4.50 \$55.00 = 19.00%...
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Fomular and Solution - Chap 8 - After new issuance of stock...

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