Question

In: Finance

Valiant Industries has 30 million shares of stock outstanding at a price of $25.44 per share....

Valiant Industries has 30 million shares of stock outstanding at a price of $25.44 per share. The company wishes to raise more money and plans to do so through a rights issue. Every existing stockholder will receive one right for each share of stock held. For every six rights held by the stockholder, they can buy one share at a price of $24.00 per share. If all rights are exercised, how much money will be raised in this offer? A. $127.2 million B. $720.0 million C. $120.0 million D. Some other amount

Solutions

Expert Solution

CALCULATION OF THE MONEY RAIESED FROM THE OFFERE
Share outstanding = $                               30.00 Million Shares
Total Rights =                                    30.00 Million Rights
1 new shares are issued against 6 Right
So number of shares are issued = $ 30 Million / 6 =                                      5.00 Million Shares
Issue price of the shares = 5 Million shares X $ 24 = $                             120.00
So, Answer = Money raised from the offer = Option C = $ 120 Million

Related Solutions

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...
Acort Industries has 11 million shares outstanding and a current share price of $45 per share....
Acort Industries has 11 million shares outstanding and a current share price of $45 per share. It also has​ long-term debt outstanding. This debt is risk​ free, is four years away from​ maturity, has an annual coupon rate of 10%​, and has a $120 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 6%. Acort has EBIT of $106 ​million, which is...
TAFKAP Industries has 2 million shares of stock outstanding selling at $16 per share, and an...
TAFKAP Industries has 2 million shares of stock outstanding selling at $16 per share, and an issue of $12 million in 8.0 percent annual coupon bonds with a maturity of 15 years, selling at 105 percent of par. Assume TAFKAP’s weighted average tax rate is 21 percent, it can make full use of the interest tax shield, and its cost of equity is 14.0 percent. What is TAFKAP’s WACC? (Do not round intermediate calculations. Round your final answer to 2...
AFKAP Industries has 2 million shares of stock outstanding selling at $13 per share, and an...
AFKAP Industries has 2 million shares of stock outstanding selling at $13 per share, and an issue of $12 million in 8.5 percent annual coupon bonds with a maturity of 20 years, selling at 107 percent of par. Assume TAFKAP’s weighted average tax rate is 34 percent and its cost of equity is 13.0 percent. What is TAFKAP’s WACC?
Acort Industries has 14 million shares outstanding and a current share price of $ 46 per...
Acort Industries has 14 million shares outstanding and a current share price of $ 46 per share. It also has​ long-term debt outstanding. This debt is risk​ free, is four years away from​ maturity, has an annual coupon rate of 8 % ​, and has a $ 108 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 4.8 %. Acort has EBIT...
TAFKAP Industries has three million shares of common stock outstanding selling at $17 per share. The...
TAFKAP Industries has three million shares of common stock outstanding selling at $17 per share. The company recently paid a dividend of $1 and has a growth rate of 5%. The company also has an issue of $20 million (face value) in 7.5 percent, annual coupon bonds with a maturity of 15 years, selling at $1060. The company has no preferred stock. If TAFKAP’s weighted average tax rate is 34 percent, what is TAFKAP’s WACC?
8) Acort Industries has 10 million shares outstanding and a current share price of $40 per...
8) Acort Industries has 10 million shares outstanding and a current share price of $40 per share. It also has​ long-term debt outstanding. This debt is risk​ free, is four years away from​ maturity, has an annual coupon rate of 10%​, and has a $100 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 6%. Acort has EBIT of $106 ​million, which...
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,...
Rumolt Motors has 35 million shares outstanding with a price of $14 per share.
Rumolt Motors has 35 million shares outstanding with a price of $14 per share. In addition, Rumolt has issued bonds with a total current market value of $521 million. Suppose Rumolt's equity cost of capital is 10%, and its debt cost of capital is 5%.a. What is Rumolt's pretax weighted average cost of capital?b. If Rumolt's corporate tax rate is 21%,what is its after-tax weighted average cost of capital?a. What is Rumolt's pretax weighted average cost of capital?Rumolt's pretax weighted...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT