1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
borishaifa [10]
3 years ago
11

Baruk Industries has no cash and a debt obligation of $36 million that is now due. The market value of​ Baruk's assets is $ 81$8

1 ​million, and the firm has no other liabilities. Assume perfect capital markets. a. Suppose Baruk has 1010 million shares outstanding. What is​ Baruk's current share​ price? b. How many new shares must Baruk issue to raise the capital needed to pay its debt​ obligation? c. After repaying the​ debt, what will​ Baruk's share price​ be?
Business
1 answer:
Gre4nikov [31]3 years ago
8 0

Answer and Explanation:

The given values are:

Debt obligation

= $36 million

Market value

= $81 ​million

Outstanding shares

= $10 million

(a)...

Net Assets of the firm will be:

= 81 - 36

= $45 \ million

Now, the current share price will be:

= \frac{45}{10} = $4.5 \ per \ share

(b)...

Number of shares to be issued to repay debt obligation will be:

= \frac{36}{4.5} = $8 \ million \ shares

(c)...

The total number of outstanding shares will be:

= 10+8

= $18 \ million

Now,

The Current share price will be:

= \frac{Net \ assets \ of \ the \ firm}{Total \ no \ of \ outstanding \ shares}

= \frac{81}{18}

= $4.5 \ per \ share

You might be interested in
When something is grown and harvested in the same country it is distributed in, it can be considered what?
Vinvika [58]

Answer:

domestic

Explanation:

In business, domestic refers to the home country of the producer or consumer. The domestic market is the market within the borders of the seller's country.  Domestic contrasts with international, which refers to beyond the borders of a country.

Products that are produced and distributed within the country are domestic products. They are often referred to as local products. Domestic goods become exports if sold outside the borders of their country of origin.

5 0
3 years ago
Two principles of fraud insurance​
Arturiano [62]

hi buddy

here is your answer

  • Insurance fraud involves any misuse of insurance policies or applications in order to illegally gain or benefit.
  • Insurance fraud is usually an attempt to exploit an insurance contract for financial gain. The majority of insurance fraud cases involve exaggerated or false claims.

hope it helps

please mark me pls

#sibi❤

8 0
3 years ago
Bonds that have interest coupons attached to their certificates, which the bondholders present to a bank or broker for collectio
kiruha [24]
<span>The bond is a written promise to pay the bond's par value and interest at a stated contract rate. </span><span>Bonds that have interest coupons attached to their certificates, which the bondholders present to a bank or broker for collection, are called coupon bonds. 
</span><span>Bondholders detach coupons when they mature and present them to a bank or broker for collection.
</span>
3 0
3 years ago
ABC C.o just completed an IPO with an investment bank on a firm-commitment basis. The firm issues 3 million shares of common sto
Brut [27]

Answer: $150,000,000

Explanation:

Question is:

What were the total proceeds from the common stock sale?

Total proceeds refer to the total amount that the sale of the stock generated. This means that you should not account for the underwriting fees as of yet but just the amount that came in.

= Number of shares sold * price per share

= 3,000,000 * 30

= $150,000,000

3 0
3 years ago
Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $40. The following cost data per fan is
olga55 [171]

Answer:$50

Explanation:

3 0
4 years ago
Other questions:
  • Which of the following is NOT one of the reasons that globalization has taken place?
    6·1 answer
  • When preparing government-wide financial statements at the end of the fiscal year, Meen County recorded an adjusting entry for s
    15·1 answer
  • This Government Representative is appointed by the Contracting Officer to serve as a technical liaison between the Government an
    11·1 answer
  • Magazines and journals are examples of periodical resources. True False
    15·2 answers
  • Your goal is to have $15,000 in your bank account by the end of four years. If the interest rate remains constant at 4% and you
    5·1 answer
  • Connie Shockey wants to put funds in an account that does not offer checking privileges because she has a tendency to overspend.
    15·1 answer
  • You have the following information on Marco's Polo Shop: total liabilities and equity = $210 million; current liabilities = $50
    12·1 answer
  • You have been assigned the task of using the corporate, or free cash flow, model to estimate Petry Corporation’s intrinsic value
    14·1 answer
  • Assuming a routine manufacturing activity, present journal entries (account titles only) for each of the following transactions:
    14·1 answer
  • A firm issued 10,000 shares of $2 par-value common stock, receiving proceeds of $40 per share. The amount recorded for the paid-
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!