P15-8 Price Dilution [LO3] Left Turn, Inc., has 126,000 shares of stock outstanding. Each share is...

P15-8 Price Dilution [LO3]

Left Turn, Inc., has 126,000 shares of stock outstanding. Each share is worth $80, so the company's market value of equity is $10,080,000.

Required:

(a)

Suppose the firm issues 18,000 new shares at the price of $80, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

(Click to select)32.50-0.2548.000.250.00

(b)

Suppose the firm issues 18,000 new shares at the price of $74, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

(Click to select)46.80-0.79-0.75-0.7130.80

(c)

Suppose the firm issues 18,000 new shares at the price of $58, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.)

(Click to select)-2.75-2.8927.6043.60-2.61

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

P15-8 Price Dilution [LO3] Left Turn, Inc., has 176,000 shares of stock outstanding. Each share is...

P15-8 Price Dilution [LO3] Left Turn, Inc., has 176,000 shares of stock outstanding. Each share is worth $100, so the company's market value of equity is $17,600,000. Required: (a) Suppose the firm issues 22,000 new shares at the price of $100, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (Click to select) 0.25, 0.00, 80.00, 60.50, -0.25 (b) Suppose the firm issues 22,000 new shares at...

P15-8 Price Dilution [LO3] Left Turn, Inc., has 100,000 shares of stock outstanding. Each share is...

P15-8 Price Dilution [LO3] Left Turn, Inc., has 100,000 shares of stock outstanding. Each share is worth $90, so the company's market value of equity is $9,000,000. Required: (a) Suppose the firm issues 20,000 new shares at the price of $90, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (Click to select)0.250.000.50-0.2518.00 (b) Suppose the firm issues 20,000 new shares at the price of $79, what...

Left Turn, Inc., has 108,000 shares of stock outstanding. Each share is worth $90, so the...

Left Turn, Inc., has 108,000 shares of stock outstanding. Each share is worth $90, so the company's market value of equity is $9,720,000. Required: (a) Suppose the firm issues 18,000 new shares at the price of $90, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (b) Suppose the firm issues 18,000 new shares at the price of $80, what will the effect be of this offering price...

Left Turn, Inc., has 96,000 shares of stock outstanding. Each share is worth $80, so the...

Left Turn, Inc., has 96,000 shares of stock outstanding. Each share is worth $80, so the company's market value of equity is $7,680,000. (a) Suppose the firm issues 16,000 new shares at the price of $80, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (b) Suppose the firm issues 16,000 new shares at the price of $73, what will the effect be of this offering price on...

Left Turn, Inc., has 75,000 shares of stock outstanding. Each share is worth $80, so the...

Left Turn, Inc., has 75,000 shares of stock outstanding. Each share is worth $80, so the company's market value of equity is $6,000,000. Required: (a) Suppose the firm issues 15,000 new shares at the price of $80, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (b) Suppose the firm issues 15,000 new shares at the price of $74, what will the effect be of this offering price...

Left Turn, Inc., has 128,000 shares of stock outstanding. Each share is worth $90, so the...

Left Turn, Inc., has 128,000 shares of stock outstanding. Each share is worth $90, so the company's market value of equity is $11,520,000. Required: (a) Suppose the firm issues 16,000 new shares at the price of $90, what will the effect be of this offering price on the existing price per share? (Do not round your intermediate calculations.) (Click to select) -0.25, 0.25, 0.00, 72.00, 54.50 (b) Suppose the firm issues 16,000 new shares at the price of $78,...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87,...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon of 10 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon of 11 percent, and sells for 105 percent of par. The first issue...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a coupon of 9 percent, and sells for 95 percent of par. The second issue has a face value of $60 million, a coupon of 10 percent, and sells for 108 percent of par. The first issue...

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...

Company X has 8 million shares of common stock outstanding. The current share price is $57,...

Company X has 8 million shares of common stock outstanding. The current share price is $57, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $70.8 million and a coupon rate of 7 percent and sells for 107 percent of par. The second issue has a face value of $60 million and a coupon rate of 7 percent and sells for 109 percent of...

Subjects