Question

In: Finance

xyz inc. currently has 5 million shares outstanding at a market price of 13 per share...

xyz inc. currently has 5 million shares outstanding at a market price of 13 per share . xyz inc declares a 1 for 4 stock dividend. how many shares will be outstanding after the dividend is paid? after the stock dividend what is the new price per share and what is the total market value of the firm?

Solutions

Expert Solution

Shares outstanding after the dividend is paid = 5 + (5*1/4) = 6.25 million shares.

Total Market Value = Number of share * Price of per share

                              =$ (5 * 13) million

                              = $ 65 million

New price per share = Total Market Value / Total number of share outstanding

                                 =65 / 6.25

                             = $ 10.4/ share

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

A firm has 5 million shares outstanding with a market price of $35 per share. The...
A firm has 5 million shares outstanding with a market price of $35 per share. The firm has $15 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places....
KD Industries has 30 million shares outstanding with a market price of $20 per share and...
KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt. KD has had consistently stable earnings, and pays a 21% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. If KD expects the share price to increase from $20 per share to a new share price on announcement of the transaction and before...
Celom has 5 million shares of common stock outstanding with a current price per share of...
Celom has 5 million shares of common stock outstanding with a current price per share of $15 per share. The company has 2 million shares of preferred stock outstanding with a current price of $20 per share. The company also has 5,000 bonds outstanding with a par value of $1,000 each and a coupon rate of 6%. The bonds are quoted at 102. What weightings should Celom use for its WACC calculation? Therbo Inc's market weighing's of its debt, preferred...
XYZ has 9 million shares of stock outstanding. The current share price is $50, and the...
XYZ has 9 million shares of stock outstanding. The current share price is $50, and the book value per share is $6. The firm also has two bond issues outstanding. The first bond issue has a face value of $70 million and an 8% annual coupon; it sells for 95% of par. The second bond has a face value of $60 million and a 7% annual coupon; it sells for 97% of par. The first bond matures in 10 years,...
Green Lake Corp. has 10 million shares outstanding with a market price of $25 per share...
Green Lake Corp. has 10 million shares outstanding with a market price of $25 per share and no debt. The company marginal tax rate is 40%. The CFO of Green Lake plans to issue a $100 million debt and use the proceeds to repurchase the outstanding shares. Assume that Green Lake prepares to repurchase the existing shares from the open market at $25 per share. What will the new share price be after the repurchase?
The shares of XYZ Inc. are currently selling for $120 per share. The shares are expected...
The shares of XYZ Inc. are currently selling for $120 per share. The shares are expected to go up by 10 percent or down by 5 percent in each of the following two months (Month 1 and Month 2). XYZ Inc. is also expected to pay a dividend yield of 2 percent at the end of Month 1. The risk-free rate is 0.5 percent per month. What is the value of an American call option on XYZ shares, with an...
The shares of XYZ Inc. are currently selling for $120 per share. The shares are expected...
The shares of XYZ Inc. are currently selling for $120 per share. The shares are expected to go up by 10 percent or down by 5 percent in each of the following two months (Month 1 and Month 2). XYZ Inc. is also expected to pay a dividend yield of 2 percent at the end of Month 1. The risk-free rate is 0.5 percent per month. a.       What is the value of an American call option on XYZ shares, with...
Company XYZ has 8.3 million shares outstanding. The current share price is $53, and the book...
Company XYZ has 8.3 million shares outstanding. The current share price is $53, and the book value per share is $4. XYZ has two bonds outstanding. Bond 1 has a face value of $70 million and a 7 percent Coupon rate and sells for 108.3% of par. Bond 2 has a face value of $60 million and 7.5% coupon rate and sells for 108.9% of par. Bond 1 matures in 8 years, Bond 2 matures in 27 years. All coupon...
Company XYZ has 8.3 million shares outstanding. The current share price is $53, and the book...
Company XYZ has 8.3 million shares outstanding. The current share price is $53, and the book value per share is $4. XYZ has two bonds outstanding. Bond 1 has a face value of $70 million and a 7 percent Coupon rate and sells for 108.3% of par. Bond 2 has a face value of $60 million and 7.5% coupon rate and sells for 108.9% of par. Bond 1 matures in 8 years, Bond 2 matures in 27 years. All coupon...
XYZ Company has currently $2 million shares of common stock outstanding, and the selling price of...
XYZ Company has currently $2 million shares of common stock outstanding, and the selling price of each stock is $25. They want to extend $3 Million through bond issuance at 10% interest rate. Financial analyst estimated $2 Million EBIT. The marginal tax rate is 35%. a) What would be the earning per share?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT