An option that the lead underwriter may exercise to sell as much as an additional 15% or more shares than originally planned is called:

When an investment banker sells equity for a firm but makes no guarantee about the ultimate success of the offering, he or she is selling the securities under:

You own an ordinary share that just paid an annual dividend of €6. The firm expects to grow at a 4% perpetual rate. If the required rate of return for the share is 10% then what is the price that you should be able to sell the share for now?

The Growth Firm forecasts that its cash flows will increase by 5% per year indefinitely. It just paid a €4 annual dividend on its preferred shares and the price of the shares is currently €40. What is the required rate of return for the shares?

You are trying to value some preferred shares that will pay a €4 annual dividend one year from today. The required rate of return on the shares is 11%. What is the value of the shares?

You are analyzing a firm that currently has a weighted average cost of capital equal to 13%. You believe that the firm's after-tax cost of debt will increase by 3% next year. If the firm finances itself with 40% debt and 60% equity, then what will be the firm's new weighted average cost of capital if you are correct?

You see that Steady Co.'s preferred shares pay an annual dividend of €5 and you know that the required rate of return for the shares is 10%. You also know that the company forecasts its cash flows to increase by 3% per year for the foreseeable future. What is the fair price for the preference shares?

You know that the price of a preference share is €36.36 and you also know that the required rate of return on the share is 11%. What annual dividend must the preference share be paying?

Savings Co. retains 90% of its net income for reinvestment purposes. If Savings had a return on equity of 20% last year then estimate Savings' growth rate.

Your firm annually produces €5,000,000 of free cash flow and it has a weighted average cost of capital equal to 8%. What is the value of the firm if it has no growth prospects?