21. The investment banking firm of Graham Bell & Co. will use a dividend valuation model to appraise the shares of the Phone Corporation. Dividends (D) at the end of the current year will be $1.64. The growth rate (g) is 8% and the discount rate (K) is 13 %. a. What should be the price of the stock to the public? (2) b. If there is a 7% total underwriting spread on the stock, how much will the issuing corporation receive? (2) c. If the issuing corporation requires a net price of $31.30 (proceeds to the corporation) and there is a 7% underwriting spread, what should be the price of the stock to the public? (2) 22. Answer the below question based upon the following information on Fitbit: Fitbit RRF 2% Initial Investment RM 9% Units of Sales Investment Price per Unit Year Year -$5,000,000 150,000 $400 Banking Fee or Floating Rate 7% Existing Fitbit Variable Cost per Unit $250 Shares 2,000,000 New IPO Fixed Cost $1,000,000 Shares 36,500,000 $91,100,000 Depreciation $1,500,000 Pre-IPO Value Tax Rate 35% What is the price per share for the Fitbit IPO? (4) 23. Mark's Manufacturing Inc. average age of accounts receivable is 45 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year, what is the length of its cash conversion cycle? (2) 24. Omega Technology ("Omega) has 5.5 million shares of common stock outstanding. The current market price of Omega common stock is $52 per share rights-on. The company's net income this year is $17.5 million. A rights offering has been announced in which 550,000 new shares will be sold at $46.50 per share. The subscription price plus 5 rights is needed to buy one of the new shares. a. What are the carnings per share and price-earnings ratio before the new shares are sold via the rights offering? (2) b. What would the earnings per share be immediately after the rights offering? What would the price-earnings ratio be immediately after the rights offering? (Assume there is no change in the market value of the stock, except for the change when the stock begins trading ex-rights.). (2)