Chapter 15, Question 1- Moonscape has just completed an initial public offering. The firm sold 1 million shares at an offer price of $10 per share. The underwriting spread was $.70 a share. The price of the stock closed at $15 per share at the end of the first day of trading. The firm incurred $100,000 in legal, administrative, and other costs. What were flotation costs as a fraction of funds raised? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)   Costs as percent of funds raised [removed]%   Chapter 15, Question 3- Associated Breweries is planning to market unleaded beer. To finance the venture, it proposes to make a rights issue with a subscription price of $10. One new share can be purchased for every two shares held. The company currently has outstanding 120,000 shares priced at $40 a share. Assuming that the new money is invested to earn a fair return, give values for the following: a. Number of new shares.   Number of new shares [removed]  b. Amount of new investment.   New investment $ [removed]  c. Total value of company after issue.   Value of company $ [removed]  d. Total number of shares after issue.   Total number of shares [removed]  e. Share price after the issue.   Share price after issue $ [removed]  Chapter 16, Question 2- River Cruises is all-equity-financed. Current Data   Number of shares 100,000   Price per share $ 10   Market value of shares $ 1,000,000 State of the Economy Slump  Normal Boom   Profits before interest $ 80,500 136,000 197,500 Suppose it now issues $250,000 of debt at an interest rate of 10% and uses the proceeds to repurchase 25,000 shares. Assume that the firm pays no taxes and that debt finance has no impact on firm value. Refer to the above table to compute the missing data. (Do not round intermediate calculations. Round "Earnings per share" to 3 decimal places. Enter "Return on shares" as a percent rounded to 2 decimal places.) Outcomes   Number of shares [removed]           Price per share $10            Market value of shares $ [removed]           Market value of debt $ [removed]         State of the Economy    Slump    Normal    Boom   Profits before interest $80,500         $136,000         $197,500           Interest $ [removed]        $ [removed]        $ [removed]          Equity earnings $ [removed]        $ [removed]        $ [removed]          Earnings per share $ [removed]        $ [removed]        $ [removed]          Return on shares [removed]%     [removed]%     [removed]%     Expected Outcome .

1. Chapter 15, Question 1- Moonscape has just completed an
initial public offering. The firm sold 1 million shares at an offer
price of $10 per share. The underwriting spread was $.70 a
share. The price of the stock closed at $15 per share at the end
of the first day of trading. The firm incurred $100,000 in legal,
administrative, and other costs. What were flotation costs as a
fraction of funds raised?
(Do not round intermediate calculations. Enter your answer as a
percent rounded to 2 decimal places.)
Costs as percent of funds raised
[removed]%
Chapter 15, Question 3- Associated Breweries is planning to
market unleaded beer. To finance the venture, it proposes to
make a rights issue with a subscription price of $10. One new
share can be purchased for every two shares held. The company
currently has outstanding 120,000 shares priced at $40 a share.
Assuming that the new money is invested to earn a fair return,
give values for the following:
a.
Number of new shares.
Number of new shares
[removed]

2. b.
Amount of new investment.
New investment
$ [removed]
c.
Total value of company after issue.
Value of company
$ [removed]
d.
Total number of shares after issue.
Total number of shares
[removed]

3. e.
Share price after the issue.
Share price after issue
$ [removed]
Chapter 16, Question 2- River Cruises is all-equity-financed.
Current Data
Number of shares
100,000

4. Price per share
$
10
Market value of shares
$
1,000,000
State of the Economy
Slump
Normal
Boom
Profits before interest
$
80,500
136,000

5. 197,500
Suppose it now issues $250,000 of debt at an interest rate of
10% and uses the proceeds to repurchase 25,000 shares. Assume
that the firm pays no taxes and that debt finance has no impact
on firm value. Refer to the above table to compute the missing
data.
(Do not round intermediate calculations. Round "Earnings per
share" to 3 decimal places. Enter "Return on shares" as a
percent rounded to 2 decimal places.)
Outcomes
Number of shares
[removed]
Price per share
$10
Market value of shares
$ [removed]
Market value of debt
$ [removed]

6. State of the Economy
Slump
Normal
Boom
Profits before interest
$80,500
$136,000
$197,500
Interest
$ [removed]
$ [removed]
$ [removed]
Equity earnings
$ [removed]
$ [removed]
$ [removed]
Earnings per share
$ [removed]
$ [removed]
$ [removed]
Return on shares
[removed]%
[removed]%
[removed]%
Expected Outcome