1. Cash Equation: McConnell Corp. has a book net worth of $16,500. Long-term debt is $7,800. Net working capital, other than cash is, $1,900. Fixed assets are $20,700. How much cash does the company have? If current liabilities are $2,750, what are current assets?
2. Rights Offerings: Again, Inc., is proposing a rights offering. Presently, there are 450,000 shares outstanding at $90each. There will be 80,000 new shares offered at $84 each.
a. What is the new market value of the company?
b. How many rights are associated with one of the new shares?
c. What is the ex-rights price?
d. What is the value of a right?
3. Using Spot and Forward Exchange Rates: Suppose the spot exchange rate for the Canadian dollar is Can$1.02 and the six-month forward rate is Can$1.03.
a. Which is worth more, a U.S dollar or a Canadian dollar?
4. Cross-Rates and arbitrage: Suppose the Japanese yen exchange rate is Y93 =$1, and the British pound exchange rate is E 1 = $1.64.
a. What is the cross-rate in terms of yen per pound?
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This Solution deals with calculation of related values in the capital structure, valuation in rights offering, exchange rates and cross currency rates.