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shares

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Katie Homes and Garden Co. has 14,700,000 shares outstanding. The stock is currently selling at $80 per share. If

an unfriendly outside group acquired 15 percent of the shares, existing stockholders will be able to buy new shares at 20 percent below the currently existing stock price.

a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect? (Do not round intermediate calculations.)

b. What will be the new purchase price for the existing stockholders? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 
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essay

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helloMy group has written an essay but the professor is saying that although it has all the necessary

elements, it is not coherent and confusing. Is there someone who can read and shorten our essay? How long an dhow much will it take?

 
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dividend

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Ecology Labs Inc. will pay a dividend of $4.30 per share in the next 12 months (D1). The

required rate of return (Ke) is 18 percent and the constant growth rate is 10 percent. (Each question is independent of the others.)   

a. Compute the price of Ecology Labs’ common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Assume Ke, the required rate of return, goes up to 23 percent. What will be the new price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. Assume the growth rate (g) goes up to 13 percent. What will be the new price? Ke goes back to its original value of 18 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.

d. Assume D1 is $5.10. What will be the new price? Assume Ke is at its original value of 18 percent and g goes back to its original value of 10 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 
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coupon rates

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Consider three bonds with 5.30% coupon rates, all making annual coupon payments and all selling at face value. The

short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.

a. What will be the price of the 4-year bond if its yield increases to 6.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What will be the price of the 8-year bond if its yield increases to 6.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

c. What will be the price of the 30-year bond if its yield increases to 6.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

d. What will be the price of the 4-year bond if its yield decreases to 4.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

e. What will be the price of the 8-year bond if its yield decreases to 4.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

f. What will be the price of the 30-year bond if its yield decreases to 4.30%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

g. Comparing your answers to parts (a), (b), and (c), are long-term bonds more or less affected than short-term bonds by a rise in interest rates?

  • More affected
  • Less affected

h. Comparing your answers to parts (d), (e), and (f), are long-term bonds more or less affected than short-term bonds by a decline in interest rates?

  • More affected
  • Less affected
 
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