Financial Management (case scenario)
The theoretical ex-rights price may be calculating the following way. We have the following known variables:
Fair value of all shares = 12,000,000 * 135 = 1,620,000,000
Total amount received from exercise of rights = 1,500,000*108 = 162,000,000
Number of shares prior to exercise = 12,000,000
Number of shares issued in the exercise = 1,500,000
Then, the theoretical ex-rights price is 1,620,000,000 + 162,000,000)/(12,000,000 + 1,500,000) = 132 cents
Hence, the value of a right is 3 cents..
The Alpha Leisure is issuing at a discount to make the shares more interesting for the investors. However, if we consider an investor from outside the company (one who doesn't have ordinary shares in the company until now), then he will purchase actions at 108 cents, plus the 24 cents per action, representing the 8 rights necessary to buy an action. In this way, the price will arrive at the ex-rights price, which would have been 132.
WACC can be calculated by multiplying the cost of each capital component by its weighting and then summing. As in our case, we have one debt element (debentures stock) and two equity elements (preference shares and common shares). Let's address each in part:
Total market value = $26,000,000
Total value of debt = 8.0 mil, that...
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03)^20]] 6. The formula for calculating the price of a zero coupon bond is P = M / (1 + I )^n In this case, the interest is priced to 9% and the term to 20 years. These figures are doubled, because the price of zero coupon bonds is based on semi-annual. Therefore, the price of this bond would be 1000 / (1 + .045) ^ 40 = 171.93. 7. We would use the
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It is hoped that the value added by the UDA system will help to increase sales of the core product. The division manager of Gadgets has a valid point in regards to the overall impact on the Division's profits. He had a valid reason for requesting this exception to the rules. It may at first appear that the Gadget Division manager is acting out of self-interest and protectionism. However,
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Budgeting and Financial Management � Case AnalysisBudgeting and financial management are critical processes in public administration efforts as they play an important role in governance. Organizations in both the public and private sectors carry out budgeting and financial management to allocate resources to different functional departments and ensure effective utilization of these resources. According to National Center for Education Statistics (2004), budgeting primarily entails allocating finite resources to an organization�s
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