Share repurchase |
Value |
Number of share repurchase |
115 |
Expenses |
$ 13,325.00 |
Share price |
$ 116.00 |
Shareholder’s wealth |
$ 116.00 |
Dividend payment |
Value |
outstanding shares |
5,125 |
Expenses |
$ 13,325.00 |
Share price |
$ 116.00 |
Alternative share price |
$ 113.40 |
Dividend |
$ 2.60 |
Shareholder’s wealth |
$ 116.00 |
Answer to b:
Share repurchase |
Value |
Actual outstanding shares |
5,010 |
Outstanding shares |
5,125 |
EPS |
$ 4.25 |
Number of share repurchase |
115 |
New EPS |
$ 4.35 |
Share price |
$ 116.00 |
New EPS |
$ 4.35 |
P/E |
26.68 |
Dividend payment |
Value |
Alternative share price |
$ 113.40 |
EPS |
$ 4.25 |
P/E ratio |
26.68 |
Answer to a:
Helena’s Health Food |
|
Actual Total market value |
201,818 |
Ke |
13% |
Market value of equity |
143,818 |
Kd |
5.50% |
Earnings before interest |
20,000 |
Market value of debt |
58,000 |
Equilibrium value |
181,818 |
WACC |
5.32% |
Investment |
2,876.36 |
Expected increment in income |
152.93 |
Total amount received |
3,029.29 |
Answer to a:
Particulars |
Value |
Close out position value |
92.46 |
Contract number |
5 |
90 day future contract |
93.67 |
Face value |
1,000,000 |
Actual investment |
468,350,000 |
Close out position |
462,300,000 |
Loss in future contract |
(6,050,000) |
Answer to b:
Particulars |
Value |
Contract number |
2 |
Close out position value |
96.02 |
Face value |
100,000 |
10-year bond futures |
94.69 |
Actual investment |
18,937,000 |
Close out position |
19,204,000 |
Profit in transaction |
267,000 |
Answer to c:
Particulars |
Value |
SPI 200 futures |
5,350.00 |
Contract number |
5 |
Close out position value |
5,480.00 |
Actual investment |
26,750 |
Close out position |
27,400 |
Profit in transaction |
650 |
Answer to a:
Particulars |
Value |
Share price |
24.00 |
Issue |
4.00 |
Subscription price |
21.10 |
Number of shares required |
1.00 |
Value of the right in cents |
1.45 |
Answer to b:
Particulars |
Value |
Share price |
24.00 |
Issue |
4.00 |
Subscription price |
21.10 |
Value of introduced shares |
84.40 |
Market value of 5 shares |
108.40 |
Therefore theoretical ex-right share value |
21.68 |
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