The company Beating Inc

1.- The company Beating Inc has 3 million common shares outstanding, and they have a new project in mind, the investment needed is €6
million.
The current Corp.'s stock price is 55
Beating is debating between two scenarios:
1.Three shares of outstanding stock are entitled to purchase one additional share of the new issue.
2.Seven shares of outstanding stock are entitled to purchase one additional share of the new issue.
What are the ex-rights stock price, the value of a right, and the appropriate subscription prices under scenarios 1 and 2?
2.- ALSET, Inc., has 200,000 shares of stock outstanding. Each share is worth 100€, so thecompany's market value of equity is 20,000,000€.
Suppose the firm issues 30,000 new shares at the following prices: 95€, 100€,105€. What are the number of rights needed in each case?
What will the effect be of each of these alternative offering prices on the existing price per share?
3.- TEBAHPLA corporation would like to rise 6,000,000€ via rights offering.
Today TEBAHPLA has a price per share of 100€, and their outstanding stocks are 100,000,000. The company, has agreed to go forward with the rights offering
entering into an agreement with Capmal investment bank, who will charge a 7% spread. Capmal has fixed the subscription price at a value of 50€ per share.
You owe a 2.5% of the company, and you decide to sell your rights, how much money van you ask for your rights?
4.- The company Casagrande company Inc. with the shareholders equity shown below declares a stock dividend of 18 percent.
The market value of its common stock is €105 per share, while the par value is 2.
Common stock 100.000 €
Capital surplus 3.000.000 €
Retained earnings 1.000.000 €
Total owners' equity 4.100.000 €
a) How many shares are they going to issue?
b) What is the new statement of shareholders Equity?
5.- Evil corporation has 4 million shares of stock outstanding that sell for €99 per share.
Imagine there are no taxes, what will be the price per share and the new number of shares outstanding after:

1. A five-for-three stock split?
2. A 20 percent stock dividend?
3. A three-for-five reverse stock split?
   Questions (20 points)
   a) Do you think that dividend is relevant for you when you are deciding where to invest? Why?
   b) What is the impact of a stock repurchase on a company's debt ratio? Give a numerical example.
   Rubrics
   Descriptor
   9-10 The student demonstrates an excellent understanding of the concepts.
   8-8.9 The student demonstrates a good understanding of the concepts.
   7-7.9 The student demonstrates a fair understanding of the concepts.
   6-6.9 The student demonstrates some, but insufficient understanding of the
   concepts.
   3-5.9 The student demonstrates insufficient understanding of the concepts.
   They may mention some relevant ideas or concepts, although it is clear
   that the relationship between them is not understood by the student.
   1-2.9 The student demonstrates insufficient understanding of the concepts
   and does not mention any relevant ideas or concepts.
   0 The student leaves the question blank or cheats.