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pychu [463]
4 years ago
6

Wear Ever is expanding and needs $6.8 million to help fund this growth. The company estimates it can sell new shares of stock fo

r $43 a share. It also estimates it will cost an additional $352,000 for filing and legal fees related to the stock issue. The underwriters have agreed to a spread of 7.5 percent. How many shares of stock must be sold for the company to fund its expansion?
Business
1 answer:
kakasveta [241]4 years ago
5 0

Answer: 179,811 shares

Explanation:

Given that,

Price of each share = $43

Amount needed for expansion = $6.8 million

Cost incurred for  filing and legal fees = $352000

Underwriters have agreed to a spread of 7.5 percent

Now,

Net price after the underwriter spread = $43 × ( 1 - 7.5%)

= $39.775

Total capital needed = Fund needed for growth + Legal and filing fees

= $6,800,000 + $352,000

= $7,152,000

Number of shares sold = \frac{7152000}{39.775}

= 179,811 shares

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Answer:

21%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 = $-400,000.

Cash flow in year 1 - 4 = $157,452.975

IRR = 21%

To find the IRR using a financial calculator:

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2. After inputting all the cash flows, press the IRR button and then press the compute button.  

4 0
3 years ago
Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise
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Answer:

$5,500,000

Explanation:

Total fair value of the options = Number of shares in the option × Estimated fair value per option = 1,000,000 × $5.50 = $5,500,000

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5 0
3 years ago
Premier Sports Inc has a beginning PBO balance of​ $628,000 and a beginning market-related value of plan assets of​ $560,000. Th
eimsori [14]

Answer:

Correct answer is D.

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6 0
3 years ago
The process of a company gathering information about the competitive environment, including competitor’s plans, activities and p
jeyben [28]

Answer:

The correct answer is competitive intelligence.

Explanation:

Competitive intelligence is the systematic collection of open information, which once combined and analyzed provides a better understanding of the structure, culture, behavior, capabilities, and weaknesses of a competitor's firm.  

It is a very important activity because it helps companies to better understand how the business works. This way you can learn to be better than your competitors.

Companies use competitive intelligence to compare themselves with others, allowing them to make informed decisions. Most firms today realize the importance of knowing what their competitors are doing, and the information collected allows organizations to find out about their strengths and weaknesses.

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3 years ago
At Infosoft Solutions, employees are encouraged to take care of their problems by working with one another and with customers, u
likoan [24]

Answer: Decentralized

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This is done by the seniors with the objective of effective running of operations within. The employees in such organisations usually remain more motivated than others.

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From the above we can conclude that the correct option is A.

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