Question
DEF is a company without debt, and with a market value of 100.000 euros and 10.000 shares outstanding. With the objective of making a new
DEF is a company without debt, and with a market value of 100.000 euros and 10.000 shares outstanding. With the objective of making a new investment, the company needs to raise 48.000 euros. The managers are thinking of conducting a public offering that will cost 1euro per share issued. For this, the company must issue 6000 shares.
a) Based on this information, determine the price of shares after the offering and the issue price.
b) If the issuance costs are 0 and the investment of 48.000 euros generates a present value of 60.000, determine the price at which shares will be issued, and the price of shares after the issuance took place.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started