0
Calculating Flotation costs suppose your company needs 6 million dollars to build a new assmebly line What if your target debt equity ratioo is 1.0 The flotation cost for new equity is 15 percent but?
Wiki User
∙ 15y ago
fA =(E/V)* fE + (D/V) * fD
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
How is mathematics used in financial accounting?
In financial accounting, mathematics is used in calculating changes to the capital, assets and liabilities of a company. Most transactions are recorded in mathematical figures.
How is Free Cash Flow calculated?
Free cash flow is defined as the amount of cash available to a company's investors after the company has paid its bills. There are three different formulas for calculating free cash flow. The simplest one is Free Cash Flow = net cash flow from operations - capital expenditures. These figures can be obtained from the company's balance sheet.
What is the difference between a highly geared company and a lowly geared company?
Gearing is a measure of how big a company's borrowings are, relative to its size. There are different methods of calculating gearing but the simplest and most effective is the debt-to-equity ratio. This shows how much the company owes (debt) compared to its size (equity) and is calculated by dividing total borrowings (current and long term) by net assets and is expressed as a percentage. A company with a high percentage is said to be highly geared and has large borrowings (normally from the bank) relative to its size and vice versa for a company with a low percentage.
Functions of primary market?
the main service functions of primary market are as follows: 1) Organisation: deals with the origin of the new issue. the proposal is analyzed in terms of the nature of the security, the size of the issued timings of the issue and flotation method of the issue. 2) Underwriting: underwriting is a kind of guarantee undertaken by an institution or firm of brokers ensuring the marketability of an issue. it is a method whereby the guarantor makes a promise to the stock issuing company that he would purchase a certain specific number of shares in the event of their not being invested by the pubic. 3) Distribution: the third function is that of distribution of shares. distribution means the function of sale of shares and debentures to the investors. this is performed y brokers and agents. they maintain regular lists of clients and directly contact them for purchase and sale of securities.
You had a credit card which went in to collections in 2002 and was sold to another company - originally your debt was 2000 but now it is 5500 - Is this legal?
Is it legal? That depends on how they are calculating the $5500. The creditor is entitled to charge you whatever interest rate you agreed to pay in the credit card agreement.
What does going public mean for a company?
A company goes public when shares in that company are offered for sale (floated) on a stock exchange somewhere in the world. At that point the ownership (or a share of the ownership) of the company passes to the people purchasing those shares - the public! Before this flotation the company will have been owned privately and the flotation produces funds which goes to these owners as they are in effect selling their property.
What are the formulae involving the calculation of flotation cost?
Your company is considering a project that will cost $1 million.The project will generate after-tax cash flows of $250,000 per year for 7 years. The WACC is 15% and the firm's target D/E ratio is .6 The flotation cost for equity is 5% and the flotation cost for debt is 3%. What is the NPV for the project after adjusting for flotation costs? fA = (E/V) x fE + (D/V) x fD fA = (.375)(3%) + (.625)(5%) = 4.25% PV of future cash flows = 1,040,105 NPV = 1,040,105 -1,000,000/(1-.0425) = -4,281
What are examples of flotation?
Flotation (historically spelled floatation) involves phenomena related to the relative buoyancy of objects. The term may refer to:Flotation, any material added to the hull of a watercraft to keep the hull afloatFlotation (Archaeology), a process to separate plant remains from soilFlotation (geology), a separation process of sediment grainsFloatation (The Grid single), a 1990 electronic music song by The GridFlotation, an initial public offering of stocks or shares in a company
What are the examples of flotation?
Flotation (historically spelled floatation) involves phenomena related to the relative buoyancy of objects. The term may refer to:Flotation, any material added to the hull of a watercraft to keep the hull afloatFlotation (archaeology), a process to separate plant remains from soilFlotation (geology), a separation process of sediment grainsFloatation (The Grid single), a 1990 electronic music song by The GridFlotation, an initial public offering of stocks or shares in a company
D Butler Inc needs to raise 14 million Assuming that the market price of the firms stock is 95 and flotation costs are 10 percent of the market price how many shares would have to be issued?
To raise 14,000,000 dollars, the company can either size the issue by shares or by dollar size. To solve for the number of shares for the issue: Divide the amount of money the company needs to raise 14,000,000 by the net price of the stock 85.50 (the price of the stock - 10 percent flotation costs) which equals 163,743 shares. To solve for the dollar amount of the issue: Multiply the number of shares 163,743 times the market price 95.50 for a total dollar amount of $15,555,556.
How can you prepare for safety when paddling a canoe?
wear a life vest or a flotation device. Keep a dry set of change in a waterproof bag tied to the canoe. Learn how to swim. If you're going far from shore, travel in company, or practise getting a capsized canoe back upright, how to get into it, and how to grain it from water.
Who invented the egg flotation?
Are you talking about floating fresh eggs to make sure that they are really fresh? That has been going on for centuries and no one knows although it was probably a farmer's wife in the middle ages. If you are talking about a float, like in an egg-cream float, that was probably Frank Wisner of the Cripple Creek Brewing Company
What was the flotation price of northern Ireland electricity?
NIE remained in state ownership until June 1993 when the company was floated on the London Stock Exchange. To this end, it issued a prospectus on 3 June 1993 offering for sale 164.6 million ordinary shares of 25p each (76 per cent of its authorized share capital), which at the offer price had a total value of £362 million. The offer price was 220p, of which 100p was to be payable at flotation (21 June 1993) and the balance of 120p on 28 June 1994. The vendor, the DED, acted on behalf of the Government. From National Archives: http://webarchive.nationalarchives.gov.uk/20111202195250/http://competition-commission.org.uk/rep_pub/reports/1997/fulltext/397c5.pdf
What is investment ratio?
it is the rati used in calculating the no and amount of funds investors contibuted to a company it is the rati used in calculating the no and amount of funds investors contibuted to a company it is the rati used in calculating the no and amount of funds investors contibuted to a company
Will your insurance company take into consideration where you live when calculating your insurance rates?
Yes they do.
How can you find out how much money a company made in a year?
after calculating that companie's expences
What is the stock symbol for fender guitar company?
Fender Musical Instruments Corporation is a privately held company, so they are not on the stock market, and hence do not have a stock symbol. No stock symbol yet as of March 8, 2012 News:as of March 8, 2012: Fender Musical Instruments, the maker of guitars used by music greats from Jimi Hendrix to Pink Floyd's David Gilmour has announced plans for an initial share flotation. Fender hopes the move will raise $200m (£126m), money that it will use to reduce current debts of $246m.
