bla11
Mar 2, 2013, 11:44 AM
Hi,
I have a question about issuing new common stock for an investment.
Given the company's balance sheet;
Company B Balance Sheet
Assets €1,000,000 Equity €1,000,000
Number and price of outstanding costs, as well as initial cost of the investment and PV of net cash flows, how can I derive new common stock price and number? (the whole amount will be financed through issuing additional common stock)
I only need a few pointers, not the answer :-)
I have tried many sources, but I cannot find how to approach the problem, everything seems relevant to Dividends, for which there is no mention in the exercise.
Thanks
I have a question about issuing new common stock for an investment.
Given the company's balance sheet;
Company B Balance Sheet
Assets €1,000,000 Equity €1,000,000
Number and price of outstanding costs, as well as initial cost of the investment and PV of net cash flows, how can I derive new common stock price and number? (the whole amount will be financed through issuing additional common stock)
I only need a few pointers, not the answer :-)
I have tried many sources, but I cannot find how to approach the problem, everything seems relevant to Dividends, for which there is no mention in the exercise.
Thanks