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pychu [463]
3 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]3 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:

Ans. Assuming that the withdrawal period is 300 months (25 years), you can withdraw every month $15,547.96

Explanation:

Hi, first, we have to take to future value (30 years in the future) the invested capital (both the stock account and the bond account). From there, we will consider the sum of both future values as the present value of the annuity that you are about to receive for the next 25 years (300 months). But before we do all that, we need to convert the return rates (compounded monthly) into effective monthly rates, for that we just go ahead and divide each one by 12, as follows

r(Stock) = 0.105/12= 0.00875

r(Bond)= 0.061/12 = 0.00508

r(Combined Account)= 0.069/12=0.00575

Now we are ready, first, let´s find the future value of the stock account.

FV(stock)=\frac{750((1+0.00875)^{360}-1) }{0.00875} =1,887,300.74}

Now, let´s find out how much will it be in 30 years, investing $325 per month, at the end of the month, at 0.508% effective monthly.

FV(Bond)=\frac{325((1+0.00508)^{360}-1) }{0.00508} =332,526.95

And then we add them up and we get:

FV(stock)+FV(bond)=1,887,300.74+332,526.95=2,219,827.69

Ok, now let´s find the annuity (monthly withdraw) taking into account that we are going to make 300 withdraws at a rate of 0.575% effective monthly,

[tex]2,219,827.69=A(142.7729593)

\frac{2,219,827.69}{142.7729593} =A

A=15,547.96\frac{A((1+0.00575)^{300}-1) }{0.00575(1+0.00575)^{300} }[/tex]

Best of luck.

5 0
3 years ago
Catherine works for BluCorp, which has an employee handbook stating that employees will be terminated for good cause. Catherine'
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Answer:

Contract

Explanation:

The reason is that the employee contract helps the employee to protect his rights and avoids the BluCorp to terminate the employee without any reason. So the employees act also safeguards the employee's rights and talks about the damages and the fines that will be imposed on the employer for terminating employees without any reasons.

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At times, an insignificant detail can be important to a significant event. <br> a. True<br> b. False
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A. True. You never know what the smallest detail may have.
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On October 31, 2016, the following data was accumulated to assist the accountant in preparing the adjusting entries for Dependab
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Journal entries record all transactions for a business. Transactions made on October 31, 2016 are recorder in the journal.

<h3>What is journal entry?</h3>

A journal entry is used to record a business transaction in the accounting records of a business.

The following journal entries are as follows-

A). Accounts Receivable  Dr.                            $9,670

            To Fees Earned    Cr.                                             $9,670

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B). Supplies Expenses      Dr.                           $2270

             To supplies          Cr.                                               $2270    

  (Supplies used $3,180- $910)

C).  Wages expenses          Dr.                            $1,220

             To wages payable     Cr.                                           $1,220

   (Accrued wages)    

D).  Unearned rent              Dr.                           $3,160

             To Rent revenue   Cr.                                                 $3,160

    (Rent earned 9,480/3 months)

E). Depreciation expenses   Dr.                         $1,610

         Accumulated Depreciation - Equipment                        $1,610

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Above mentioned are the journal entries to be made for Dependable Realty.

Learn more about the journal entries here:-

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Required: Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Acc
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Answer:

journal entries to record the December transactions

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Cash $10500 (debit)

Common Stock $10500 (credit)

1-Dec

Rent Expense $950 (debit)

Cash $950 (credit)

1-Dec

Prepaid Insurance $600 (debit)

Cash $600 (credit)

1-Dec

Equipment $3600 (debit)

Cash $3600 (credit)

5-Dec

Supplies Expense $300 (debit)

Accounts Payable $300 (credit)

15-Dec

Cash $7200 (debit)

Service Revenue $7200 (credit)

16-Dec

Accounts Receivable $5200 (debit)

Service Revenue $5200 (credit)

21-Dec

Cash $2400 (debit)

Accounts Receivable $2400 (credit)

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Cash $200 (credit)

Explanation:

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