A company had 158 million shares outstanding at the beginning of the year 2012. On February 2, 2012, the company issued an addit
1 answer:
The resulting price per share after new issuance will be $50
Solution:
Values:
Company shares = 158 million shares
Additional shares = 30 million shares
Market price = $50 per share
Evaluating:
Total value of equity prior to issue = Company shares * Market price
= 158 million * 50
= $7.9 billion
Value of share issue = Additional shares * Market price
= 30 million * 50
= $1.5 billion
Total value of equity after share issue = Total value of equity prior to issue + Value of share issue
= 7.9 billion + 1.5 billion
= $9.4 billion
Shares outstanding after share issue = Company shares + Additional shares
= 158 million + 30 million
= 188 million
Price per share after issue =
=
= $50
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Answer:
310,588.5
Explanation:
As is not said we can assume the 2,100 each year to be paid at the end of the year, and the 7% to be used as a compunded anually rate. So let´s first think just about the 2,100, as they are regulary payments, they can be seen as an anuity inmediate, the formula is as follows:
where sn is the future value of the regular payments, i is the interest rate and n is the number of payments and p is the amount of regular payment so in this particular case we have:
=198,367.65
So now let´s think on the gift of 29,000 as it is paid on 10 years, there will remain 20 years with an investment rate of 7% compounded anually. so there we have the classic formula of future value
where FV is the future value, PV is the present value, i is the interest rate per period, and n is the number of periods. Again in this particular case we have:
so the total amont will be:
total=198,367.65+112,220.85
total=310,588.5