Flyrite Company Currently Has Net Income of $3 Million and 1.5

question 43

Essay

Flyrite Company currently has net income of $3 million and 1.5 million common shares outstanding which sell for $20/share.Flyrite has decided to issue new stock to raise $4,000,000 to expand its operations.Flyrite's investment dealer will sell the stock for $18 with a spread of 7%.There will be a $60,000 registration cost.
A)Calculate current EPS and PE ratio.
B)How many shares will have to be sold to net $4 million?
C)Calculate new EPS and stock price immediately after the sale if the PE ratio remains constant.

• A)Calculate current EPS and PE ratio.
• B)How many shares will have to be sold to net $4 million?
• C)Calculate new EPS and stock price immediately after the sale if the PE ratio remains constant.

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Definitions:

Contingent Reflex

A reflex action that depends on specific conditions or stimuli to occur.

Stimulus Generalization

The process by which a conditioned response is triggered by stimuli similar to the original conditioned stimulus.

Behavior Modification

A therapy approach aimed at changing undesirable behaviors through reinforcement or punishment.

Stimulus Discrimination

The ability to distinguish between different stimuli, responding only to the specific stimulus conditioned.