Suppose a Bermuda-incorporated 'China-Concept company CNCOM is in the process of carrying-out a global offer. The global offer comprises a primary offer of 600 million shares and a secondary offer of 200 million shares. The vendor in the secondary offer is CNCOM's controller, MAGNATE. Just before the offer, CNCOM had 2,800 million ordinary shares of par $0.10 outstanding, with 2,520 million such shares held by tycoon MAGNATE and the remainder, 280 million shares, held by private equity investor PEINV. Suppose the IPO's final offer price is determined at $8.00 per share. At the end of the second week of secondary market trading in CNCOM's new listing, full exercise of the over-allotment option occurs, forcing CNCOM to issue 90 million new shares and the vendor, MAGNATE, to sell a further 30 million existing shares. Note that both the listing company and vendor have written Green-Shoe options (i.e., both are Option Grantors). Calculate the percentage of equity retained by MAGNATE in CNCOM after full Green Shoe exercise (Round your answer to two decimal places). After full Green-Shoe exercise, what percentage ownership of CNCOM's stock is held by PEINV? (*) Round you answer to two decimal places. After full Green-Shoe sercise, what percentage ownership of CNCOM's stock is held by the public? (*) Round your answer to two decimal places. Note that MAGNATE and PEINV do not buy shares in either the IPO or Green-Shoe. 6 Suppose CNCOM's stock trades at the close of the twentieth business day of secondary market trading at a price of $10. Accordingly, determine CNCOM's market capitalization value at the close of the twentieth business day of secondary market trading in the stock. How much gross funding (1.e., proceeds generated before consideration of any issue or transaction costs) do the following entities or parties receive from the IPO and associated Green-Shoe? CNCOM MAGNATE (11 Suppose CNCOM's price-to-book ratio (or market-to-book) ratio is 2.25 times, as based on the company's net asset position after IPO and full (i.e., 15 percent) Green-Shoe. Accordingly, determine the book value of CNCOM's net assets just prior to IPO. (#) Assume the price-to-book ratio of 2.25 reflects (1) CNCOM's closing secondary market price of $10 per share on the 20th day of listing and (2) net proceeds from IPO and full Green Shoe equal to 95 percent of the relevant gross proceeds accruing to company CNCOM. Determine CNCOM's price-to earnings ratio at IPO (and thus before consideration of Green Shoe), based on a final offer price of $7.5. (**) Suppose a Bermuda-incorporated 'China-Concept company CNCOM is in the process of carrying-out a global offer. The global offer comprises a primary offer of 600 million shares and a secondary offer of 200 million shares. The vendor in the secondary offer is CNCOM's controller, MAGNATE. Just before the offer, CNCOM had 2,800 million ordinary shares of par $0.10 outstanding, with 2,520 million such shares held by tycoon MAGNATE and the remainder, 280 million shares, held by private equity investor PEINV. Suppose the IPO's final offer price is determined at $8.00 per share. At the end of the second week of secondary market trading in CNCOM's new listing, full exercise of the over-allotment option occurs, forcing CNCOM to issue 90 million new shares and the vendor, MAGNATE, to sell a further 30 million existing shares. Note that both the listing company and vendor have written Green-Shoe options (i.e., both are Option Grantors). Calculate the percentage of equity retained by MAGNATE in CNCOM after full Green Shoe exercise (Round your answer to two decimal places). After full Green-Shoe exercise, what percentage ownership of CNCOM's stock is held by PEINV? (*) Round you answer to two decimal places. After full Green-Shoe sercise, what percentage ownership of CNCOM's stock is held by the public? (*) Round your answer to two decimal places. Note that MAGNATE and PEINV do not buy shares in either the IPO or Green-Shoe. 6 Suppose CNCOM's stock trades at the close of the twentieth business day of secondary market trading at a price of $10. Accordingly, determine CNCOM's market capitalization value at the close of the twentieth business day of secondary market trading in the stock. How much gross funding (1.e., proceeds generated before consideration of any issue or transaction costs) do the following entities or parties receive from the IPO and associated Green-Shoe? CNCOM MAGNATE (11 Suppose CNCOM's price-to-book ratio (or market-to-book) ratio is 2.25 times, as based on the company's net asset position after IPO and full (i.e., 15 percent) Green-Shoe. Accordingly, determine the book value of CNCOM's net assets just prior to IPO. (#) Assume the price-to-book ratio of 2.25 reflects (1) CNCOM's closing secondary market price of $10 per share on the 20th day of listing and (2) net proceeds from IPO and full Green Shoe equal to 95 percent of the relevant gross proceeds accruing to company CNCOM. Determine CNCOM's price-to earnings ratio at IPO (and thus before consideration of Green Shoe), based on a final offer price of $7.5. (**)
