Hw Week 4
not be traded on an exchange. The actual price would be based on negotiations between the underwriter and Edelman; we cannot say what the exact price would be, but the price would probably be set below $21.54, with $2,0 being a reasonable guess.
20-4 on page 821-822
a. Since the call premium is 11 percent, the total premium is 0.11($40,000,000) = $4,400,000. However, this is a tax deductible expense, so the relevant aftertax cost is $4,400,000(1 - T) = $4,400,000(0
Words: 1488 - Pages: 6