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Other Fields Homework Help Accounting Topic started by: jiejjrrr on Mar 1, 2018



Title: Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding whi
Post by: jiejjrrr on Mar 1, 2018
1. Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding which sell for $20/share. Flyrite has decided to issue new stock to raise $4,000,000 to expand its operations. Flyrite's investment dealer will sell the stock for $18 with a spread of 7%. There will be a $60,000 registration cost.

A) Calculate current EPS and PE ratio.
B) How many shares will have to be sold to net $4 million?
C) Calculate new EPS and stock price immediately after the sale if the PE ratio remains constant.


2. An investment dealer makes its money from

A. commissions from buyers.
B. fees from other investment dealers in the syndicate.
C. artificially supporting the share price during and after the offering.
D. none of the other answers are correct.

3. Which of the following is considered an advantage (for the corporation) of going public?

A. the president becomes a public relations man
B. extensive and time-consuming reporting requirements
C. the cost of flotation
D. none of the other answers are correct.


Title: Re: Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding ...
Post by: bolbol on Mar 3, 2018
 Here is the solution for Q2 and Q3. I will post the solution for Q1 shortly.
2. D. none of the other answers are correct.

3. C. the cost of flotation


Title: Re: Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding ...
Post by: bolbol on Mar 3, 2018
Content hidden


Title: Re: Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding ...
Post by: KhanhThien on Nov 5, 2019
Thank you