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Elena-2011 [213]
2 years ago
6

In previous question, suppose the company intends to go public by selling 3,000,000 new shares. Moreover, assume the company has

no debt but has an excess cash of $20 million, and the revenues for next year is estimated to be $25 million. Further assume thad the industry average forward EV-to-Sales multiple is 4, whereas the average trailing EV-to-Sales ratio is 5. What is the estimated IPO stock price
Business
1 answer:
pshichka [43]2 years ago
6 0

Answer:

A. $3.5 million

B. $120

Explanation:

A. Calculation for What is the post-money valuation for the last round of funding in dollars

First step is to calculate the total value of the company

Total value of the company = (200,000 + 100,000)* (150,000/100,000)

Total value of the company= (200,000 + 100,000)* $1.5

Total value of the company= 300,000 * $1.5 Total value of the company=$450,000

Now let calculate The post money valuation

Post money valuation = (200,000 + 100,000 + 400,000) * (2,000,000/400,000)

Post money valuation= (200,000 + 100,000 + 400,000) * $5

Post money valuation= 700,000 * $5

Post money valuation= $3.5 million

Therefore the post-money valuation for the last round of funding in dollars will be $3.5 million

B) Calculation for What is the estimated IPO stock price

First step is to calculate the EV

EV = $25 million * 5

EV= $100 million

Second step is to calculate the Total number of shares

Total number of shares = 700,000 + 300,000

Total number of shares = 1 million

Third step is to calculate the Equity

Equity = $100 million + $20 million

Equity = $120 million

Now let calculate the value per share

Value per share = $120 million/1 million

Value per share = $120

Therefore the estimated IPO stock price will be $120

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Lycan, Inc., has 7.9 percent coupon bonds on the market that have 6 years left to maturity. The bonds make annual payments and h
eimsori [14]

Answer:

$912.68

Explanation:

Particulars                      Time  PVF at 9.9%   Amount   Present Value

Cash Flows (Interest) 1.00        0.9099       79.00             71.88

Cash Flows (Interest)    2.00        0.8280       79.00             65.41

Cash Flows (Interest)    3.00        0.7534        79.00             59.52

Cash Flows (Interest)    4.00        0.6855        79.00            54.15

Cash Flows (Interest)    5.00        0.6238        79.00            49.28

Cash Flows (Interest)    6.00        0.5676        79.00            44.84

Cash flows (Maturity)    6.00        0.5676      1,000.00         <u>567.60</u>

Intrinsic Value of Bond or Current Bond Price                  $<u>912.68</u>

Thus, the Current bond price is $912.68

5 0
3 years ago
Flyaway Travel Company reported net income for 2021 in the amount of $90,000. During 2021, Flyaway declared and paid $2,125 in c
Jlenok [28]

Answer:

$1.85

Explanation:

Fyaway travels reported a net income of $90,000 for the year 2021

During 2021 they declared and paid a cash dividend of $2,125

They also paid $10,000 as cash dividend in common stock

Flyway has 40,000 shares outstanding

Therefore the 2021 basic earning per share can be calculated as follows

$90,000-2,125

= $87,875

40,000 shares+(10,000 shares×9/12)

40,000 shares +(10,000×0.75)

40,000+7500

= 47,500

87,875/47,500

= $1.85

Hence the basic earning per share for 2021 is $1.85

4 0
3 years ago
National Park Tours Co. is a travel agency. The nine transactions recorded by National Park Tours during May 2019, its first mon
lana66690 [7]

Answer:

National Park /Tours Co.

National Park Tours Co.

Unadjusted Trial Balance

May 31, 2019

Account Titles                Debit       Credit

Cash                            $10,700

Equipment                   25,000

Drawing                         3,500

Accounts receivable     3,500

Accounts payable                          $ 1,750

Fees Earned                                   13,900

Supplies                       2,450

Capital                                            34,700

Operating expenses   5,200

Totals                      $50,350     $50,350

Explanation:

a) Data and Calculations:

T-accounts

Cash

Account Titles                Debit       Credit

Beth Worley, Capital  (1) 34,700

Supplies                                      (2) 2,450

Equipment                                  (3) 4,500

Operating expense                   (4) 3,800

Accounts payable                    (5) 18,750

Accounts receivable (6) 10,400

Operating expense                   (8) 1,400

Drawings                                  (9) 3,500

Balance                                        10,700

Totals                         $45,100  $45,100

Equipment

Account Titles             Debit       Credit

Cash                         (3) 4,500

Accounts payable (3) 20,500

Balance                                       25, 000

Totals                       $25,000   $25,000

Beth Worley, Drawing

Account Titles           Debit       Credit

Cash                     (9) 3,500

Accounts Receivable

Account Titles           Debit       Credit

Fees Earned     (7) 13,900

Cash                                    (6) 10,400

Balance                                      3,500

Totals                   $13,900    $13,900

Accounts Payable

Account Titles           Debit       Credit

Equipment                             (3) 20,500

Cash                    (5) 18,750

Balance                      1,750

Totals                   $20,500     $20,500

Fees Earned

Account Titles           Debit       Credit

Accounts receivable            (7) 13,900

Supplies

Account Titles           Debit       Credit

Cash                   (2) $2,450

Beth Worley, Capital

Account Titles           Debit       Credit

Cash                                       (1) 34,700

Operating Expenses

Account Titles           Debit       Credit

Cash                     (4) 3,800

Cash                     (8) 1,400

Balance                                       5,200

Totals                    $5,200       $5,200

3 0
2 years ago
HELP PLEASE!
ad-work [718]

Answer: C.

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8 0
2 years ago
DeKay Dental Supplies issued $10,000 of 20-year bonds on January 1, 2021. The bonds pay interest semiannually. This is a partial
valina [46]

Answer:

8%

Explanation:

Calculation to determine the stated annual rate of interest on the bonds

First step is to calculate Semi annual coupon rate

Semi annual coupon rate= 400 ÷ $10,000

Semi annual coupon rate= 4%

Now let determine the Annual rate of interest

Annual rate of interest= 4% × 2 (Semiannually)

Annual rate of interest= 8%

Therefore the stated annual rate of interest on the bonds is 8%

7 0
2 years ago
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