Question
In: Finance
Jordan Broadcasting Company is going public at $48 net per share to the company. There also...
Jordan Broadcasting Company is going public at $48 net per share to the company. There also are founding stockholders that are selling part of their shares at the same price. Prior to the offering, the firm had $30 million in earnings divided over 10 million shares. The public offering will be for 6 million shares; 3 million will be new corporate shares and 3 million will be shares currently owned by the founding stockholders.
a. What is the immediate dilution based on the
new corporate shares that are being offered? (Do not round
intermediate calculations and round your answer to 2 decimal
places.)
b. If the stock has a P/E of 26 immediately
after the offering, what will the stock price be? (Do not
round intermediate calculations and round your answer to 2 decimal
places.)
c. Should the founding stockholders be pleased
with the $48 they received for their shares?
| Yes | |
| No |
Solutions
jeff jeffy answered 2 months agoRelated Solutions
Jordan Broadcasting Company is going public at $47 net per share to the company. There also...
Jordan Broadcasting Company is going public at $47 net per share to
the company. There also are founding stockholders that are selling
part of their shares at the same price. Prior to the offering, the
firm had $31 million in earnings divided over 8 million shares. The
public offering will be for 4 million shares; 2 million will be new
corporate shares and 2 million will be shares currently owned by
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FCF
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