Quantitative Problems Chapter 11

 Quantitative Concerns Chapter eleven Essay

п»їQuantitative Problems Part 11

Amazon, Inc. went public in September of 1998. The next information on shares outstanding was listed in the final prospectus submitted with the SEC1. In the BORSEGANG (OSTERR.), the Craigs list issued 3, 500, 000 new shares. The initial cost to the open public was $18. 00 per share. The ultimate first-day shutting price was $44. 88. 1 . In case the investment lenders retained $1. 26 every share while fees, the fact that was the net profits to Ebay? What was industry capitalization of new shares of Ebay? Solution: Net Profits to Auction web sites пЂЅ (18. 00 пЂ­ 1 . 26) п‚ґ 3, 500, 1000 пЂЅ $58, 590, 500. 00 Market Cap пЂЅ 44. 88 п‚ґ 3, 500, 1000 пЂЅ 157, 080, 000

2 . Two common figures in IPOs are underpricing and money left available. Underpricing is described as percentage transform between the giving price as well as the first day closing price. Money remaining on the table are the differences between the 1st day closing price as well as the offering value, multiplied by number of stocks and shares offered. Computed the underpricing and funds left on the table for Amazon. What does this suggest regarding the efficiency of the GOING PUBLIC process? Option: Underpricing пЂЅ ((44. 88 пЂ­ 18. 00)/18. 00) пЂЅ 149. 33% MLOT пЂЅ (44. 88 пЂ­ 18. 00) п‚ґ three or more, 500, 000 пЂЅ $94, 080, 500

3. The shares of Misheak, Inc. are expected to generated the following possible earnings over the subsequent 12 months: Returning

Probability

пЂ­5%

0. 10

5%

zero. 25

10%

0. 35

15%

0. 25

25%

0. 12

If the inventory is currently trading at $25/share, what is the expected selling price in one 12 months. Assume that the stock pays no payouts. Solution: The expected return over the next 12 months is usually calculated as: пЂ­0. 05 п‚ґ zero. 10 пЂ« 0. 05 п‚ґ 0. 25 пЂ« 0. 15 п‚ґ 0. 30 пЂ« 0. 15 п‚ґ zero. 25 пЂ« 0. twenty-five п‚ґ 0. 10 пЂЅ 0. 10 This suggests that the anticipated price is $25 * (1. 10) пЂЅ $27. 55 4. Imagine Soft People, Inc. is definitely selling by $19. 00 and at the moment pays an annual dividend of $0. sixty-five per reveal. Analysts job that the inventory will be costed around $23. 00 in a single year. Precisely what is the predicted return? Answer:

5. In September of 2004, Ms, Inc. was...


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