Problem 12-1 Calculating Returns [L01] 10 Suppose a stock had an initial price of $60 per share, paid a dividend of $.60 per share po'nts during the year. and had an ending share price of $72. Compute the percentage total return. {Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e.g.. 32.16.] mm m QBOOK References References Problem 12-3 Return Calculations [L01] Suppose a stock had an initial price of $82 per share. paid a dividend of $1.20 per share during the year, and had an ending share price of $74. Compute the percentage total return. dividend yield, and capital gains yield. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) Total return Dividend yield Capital gains yield References Problem 15-1 Rights Offerings [L04] Leah. Inc. is proposing a rights offering. Presently there are 200.000 shares outstanding at $55 each. There will be 10.000 new shares offered at $50 each. a. What is the new market value of the company? (Do not round intermediate calculations.) b. How many rights are associated with one of the new shares? (Do not round intermediate calculations.) c. What is the ex-rights price? {Do not round intermediate calculations and round your answer to 2 decimal places. e.g.. 32.16.} d. What is the value of a right? {Do not round intermediate calculations and round your answer to 2 decimal places. e.g., 32.16.} _ a Ex-n'ahts price Value of a right 4 Problem 15-4 IPO Underpricing [LO3] 10 The Woods Co. and the Speith Co. have both announced IPOs at $53 per share. One of points these is undervalued by $11, and the other is overvalued by $2, but you have no way of knowing which is which. You plan to buy 800 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. a. If you could get 800 shares in Woods and 800 shares in Speith, what would your profit eBook be? (Do not round intermediate calculations.) b. What profit do you actually expect? (Do not round intermediate calculations.) Hint a. Profit b. Expected profit Print ReferencesReferences Problem 15-8 Price Dilution [L03] Nemesis. Inc.. has 235.000 shares of stock outstanding. Each share is worth $85, so the company's market value of equity is $19,975.000. Suppose the firm issues 56,000 new shares at the following prices: $85. $79. and $73. What will be the exrights price and the effect of each of these alternative offering prices on the existing price per share? (Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "0". Round your answers to 2 decimal places, e.g.I 32.16.) -mlm- a. -_ n. - c. -_ References Problem 12-11 Calculating Real Rates [L01] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 18 percent. 14 percent. 20 percent. 22 percent. and 10 percent. Suppose the average inflation rate over this period was 3.1 percent and the average T-bill rate over the period was 4.4 percent. a.What was the average real risk-free rate over this time period? {Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e.g.. 32.16.) b.What was the average real risk premium? {Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e.g.. 32.16.) _trl _-a References Problem 15-12 Rights [L04] Bell Hill Mfg. is considering a rights offer. The company has determined that the ex-rights price would be $82. The current price is $95 per share. and there are 21 million shares outstanding. The rights offer would raise a total of $70 million. What is the subscription price? (Do not round intermediate calculations and round your answer to 2 decimal places. e.g., 32.16.] Summation price _ References Problem 15-6 Calculating Flotation Costs [L03] The Whistling Straits Corporation needs to raise $40 million to nance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $15 per share and the company's underwriters charge a spread of 5 percent. If the SEC filing fee and associated administrative expenses of the offering are $500,000. how many shares need to be sold? (Do not round intermediate calculations and enter your answer in dollars, not millions. rounded to the nearest whole number. e.g.,1.234,567.} References Problem 12-10 Calculating Reel Returns and Risk Premiums [L01] You've observed the following returns on Crash-n-Burn Computer's stock over the past ve years: IO percent. 11 percent, 18 percent, 19 percent. and 10 percent. Suppose the average ination rate over this period was 2.2 percent and the average T-bill rate over the period was 4.? percent. a. What was the average real return on the company's stock? [Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e.g.. 32.16.] b. What was the average nominal risk premium on the company's stock? [Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.} Average real return Average nominal risk premium References Problem 12-4 Calculating Returns [L01] Suppose you bought a bond with an annual coupon rate of 7.6 percent one year ago for $840. The bond sells for $885 today. a. Assuming at $1.000 face value, what was your total dollar return on this investment over the past year? In. What was your total nominal rate of return on this investment over the past year? {Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places. e.g.. 32.16.) c. lfthe ination rate last year was 2.5 percent. what was your total real rate of return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. e.g., 32.16.) a. Total dollar return _ . Nominal rate of return _ % . Real rate of return 56