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ryzh [129]
3 years ago
15

He decides to take the company public through an IPO, issuing 2 million new shares. Assuming that he successfully completes the

IPO, the net income for the next year is estimated to be $9 million. His banker informs him that the price of shares should be set using average price-earnings ratios for similar businesses, which is 14. What will be the IPO price per share
Business
1 answer:
Salsk061 [2.6K]3 years ago
4 0

Answer:

$36.79

Explanation:

Calculation to determine What will be the IPO price per share

First step is to calculate the Cumulative shares

Cumulative shares = 375,000 + 400,000 + 250,000 + 400,000 + 2 million

Cumulative shares = 3.425 million

Now let calculate the IPO price

IPO price = $14 × $9 million / 3.425 million

IPO price= $36.79

Therefore What will be the IPO price per share is $36.79

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With regard to a futures contract, the long position is held by a. the trader who plans to hold the contract open for the length
vfiekz [6]

Answer:

The answer is e. the trader who commits to purchasing the commodity on the delivery date.

Explanation:

The long position in a forward position agrees to buy the stock when the contract expires. The long futures position is an unlimited profit, unlimited risk position that can be entered by the futures speculator to profit from a rise in the price of the underlying

7 0
2 years ago
Assume that demand for a commodity is represented by the equation P=10−0.2Qd. Supply is represented by the equation P=2+0.2Qs, w
svet-max [94.6K]

Answer:

Equilibrium price=6

Equilibrium quantity=20

Explanation:

P=10-0.2Qd

P-10= -0.2Qd

Qd=p-10/-0.2

Qd=-5p+50

P=2+0.2Qs

P-2=0.2Qs

Qs=p-2/0.2

Qs=5p-10

(a)

Qs=Qd

5p-10= -5p+50

5p-10+5p-50=0

10p-60=0

10p=60

p=6

Equilibrium price=6

Equilibrium quantity

Qd=-5p+50

=-5(6)+50

=-30+50

=20

Qs=5p-10

=5(6)-10

=30-10

=20

Equilibrium quantity=20

(c) Graph has been attached showing the equilibrium price and quantity

8 0
3 years ago
Edward is a partner in ENS, Ltd. The partnership generated a loss during the current year. Edward's share of the loss was $7,000
antiseptic1488 [7]

Answer:

Edward can deduct his $7,000 loss from his adjusted gross income (AGI). Partnerships are investments that you make regardless of whether you work for them or not. One of the key characteristics of partnerships is that they are not taxed as separate entities, they pass-through their income or losses to the  partners.

3 0
3 years ago
Richard, age 50, is employed as an actuary. For calendar year 2019, he had AGI of $130,000 and paid the following medical expens
Black_prince [1.1K]

Answer:

c. $10,340

Explanation:

For year 2018, the deduction for medical expense is amount of qualified medical expense that exceeds 7.5% of AGI.

Expenditure Richard can deduct as medical expense = $5300 + $7900 + $5100 + $830 + $960 - 7.5% * $130000

= $10,340

As such option c is correct and other options a, b, d and e are incorrect.

5 0
2 years ago
With an aim of a diagram, distinguish between the income effect and substitution effect of change in price of a normal good​
Nana76 [90]

Hello. You did not present a diagram to which the question refers. However, I will try to help you in the best possible way.

The income effect is the term related to the increase or decrease in the consumer's purchasing power in relation to the fluctuation in the price of consumer products and the value of the national currency. On the other hand, the substitution effect refers to the impact between the variation of the consumers' income value and the product's prices.

4 0
2 years ago
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