Kristy Fashions, has 4.5 million shares of common stock outstanding. The current market price of common stock is 60 dollars per share rights on, The company net income this year is 18 mil. A right offering has been announced in which 450,000 news shares will be sold at 55 per share. The subscription price of 55 plus 10 right is needed to buy one of the new shares.
A. What are the earnings per share and price-earning ratio before the new shares are sold via the rights offering?
B. What would the price-earning) ratio be immediately after the rights offering? (assuming there is no change in the market value of the stock, expect for the change that occurs when the stock begins trading ex-rights.) Round all answers to two places to the right of the decimal point.© BrainMass Inc. brainmass.com October 24, 2018, 8:31 pm ad1c9bdddf
a) Earnings per Share = Net Income/Number of Shares Outstanding
EPS =$18 million earnings/4.5 million shares = $4 earnings per share
Price-Earnings Ratio (P/E) Ratio= Market Price/EPS
P/E = $60 market price/$4 ...
The solution explains the impact of rights offering on various parameters.
Describe the key elements of a valid contract
Need assistance with thoughts for the following scenario:
You invite a painter over to your home to discuss some painting that needs to be done. You discuss what needs to be painted, the desired color scheme, and the final price. Nothing is written down. You agree on terms and the painter then performs the work, for which you pay him. Have I entered into a contract? If so, what type?View Full Posting Details