Enregistré What is a cash-neutral transaction (or rights lot)? Options de la question 1 : It allows new shareholders to gain more voting rights than before the transaction by buying more new shares It allows historical shareholders to sell their preferential subscription rights and to enrich themselves It allows historical shareholders to participate in the capital increase without impacting their cash flow during a capital increase with sharholders' preferential subscription rights (Rights Issue). Question 2 (1 point) Enregistré Capital increase with shareholders' preferential subscription right (Rights Issue) is relevant when the historical shareholders do not want to participate in the capital increase. Options de la question 2 : True False Question 3 (1 point) Enregistré If the issue price has a discount of more than 5% compared to the reference price, a capital increase with shareholders' preferential subscription rights (Rights Issue) must be carried out. Options de la question 3 : False True Question 4 (1 point) Enregistré What are the conditions that would allow an equity offering to enable EPS accretion? Options de la question 4 : When the funds from the capital increase are invested in the business (capital employed), the ROCE aft tax is at least equal to the historical one and the company uses debt to maintain its financial leverage stable. When the funds from the capital increase are used to repay the financial debt, at a stable RCOE after tax 1 / PER> ROCE induced after tax 1 / PER <ROCE induced after tax Alban inc. : Capital increase (estimated time 30 mn, 5,75 points) The Alban company announced mid-december 2014, an ordinary shares equity offer, granting shareholders preferential subscription rights. The company is listed on Euronext Paris. The new shares were traded on the Euronext market from January 15, 2015. The company stressed that the proceeds from the capital increase will be used to fully finance the growth of its operations. Here below the company's main financial information. You'll consider that 2014 financial information won't be modified. Income tax rate is equal to 35% Financial Balance sheet 31/12/2014 (thousand €) 2014e Common stocks Accumulated retained earnings Retained result of the yrear Shareholders' equity Net financial debt Total financial resources 30 000,00 25 000,00 12 000,00 67 000,00 33 500,00 100 500,00 Income statement (thousand €) Turnover Ebitda Ebit Financial expenses Profit before tax Income tax expenses Net profit 2014th Pay out ratio 2014e 100 500,00 25 125,00 20 136,54 1 675,00 18 461,54 6 461,54 12 000,00 0% Equity offering terms Amount raised (thousand €) N° of shares previous to the issuance Nominal share value Stock price (at issue announcement date) 15/12/2014 Issue Price 30 000 3 000 000 10 € 50€ 40€ Shareholding before the issuance Shareholders Alban family Floating Question 5 (0,25 points) % shareholding N° of % voting rights Shares 1 650 55,00% 000,00 70,97% 1 350 45,00% 000,00 29,03% 3 000 100% 000,00 100% Enregistré Calculate the number of new shares issued. Round the result to the nearest integer and do not use comma to separate thousands. For example if you get a result of 345,623.75 then write 345624 in the answer box. Votre réponse: Options de la question 5 : Réponse Question 6 (0,25 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 6 : Paragraph Lato (Recommended) 19px (Default) Question 7 (0,25 points) Enregistré Calculate the conversion ratio. Round the result to the nearest integer. Votre réponse: Options de la question 7 : Réponse Question 8 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 8 : Paragraph Lato (Recommended) 19px (Default) Question 9 (0,25 points) Enregistré Calculate the estimated share price after the capital increase. Round the result to the nearest integer and do not put the "$" symbol in the answer box. For example if you get a result of $24.623 then write 25 in the answer box. Votre réponse: Options de la question 9 : Réponse Question 10 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 10 : Paragraph Lato (Recommended) 19px (Default) Question 11 (0,25 points) Enregistré Calculate the value of a Preferential subscription right. Round the result to the nearest integer and do not put the "$" symbol in the answer box. For example if you get a result of $15.72348 then write 16 in the answer box. Votre réponse: Options de la question 11 : Réponse Question 12 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 12 : Paragraph Lato (Recommended) 19px (Default) Question 13 (0,25 points) Enregistré Calculate the preferential subscription rights lot enabeling a historical shareholder to subscribe to the offer with no impact on his cash ( a cash neutral transaction lot). Round the result to the nearest integer. Votre réponse: Options de la question 13 : Réponse Question 14 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 14 : Paragraph Lato (Recommended) 19px (Default) Question 15 (0,25 points) Enregistré Calculate the Alban Family's % of shareholding after the new shares issuance. The Family, at that time, didn't want to invest more cash in the company but was willing to use all available means in order to reduce the dilutive impact of this Equity offer. Round the result to two decimal places and do not put the "%" symbol in the answer box. Don't use the dot "." to separate decimals but use comma"," instead. For example if you get a result of 81.0234% then write 81,02 in the answer box. Votre réponse: Options de la question 15 : Réponse Question 16 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 16 : Paragraph Lato (Recommended) 19px (Default) Question 17 (0,25 points) Enregistré The ordinary shares hold by Alban family grant a double voting rights defined in the status. What is the percentage of voting rights hold by the family following the capital increase? Round the result to two decimal places and do not put the "%" symbol in the answer box. Votre réponse: Options de la question 17 : Réponse Question 18 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 18 : Paragraph Lato (Recommended) 19px (Default) Question 19 (0,75 points) The company announced that the funds raised will be totally reinvested in the operations. The analysts consensus at the time of the issuance that the RoCE and the gearing will remain statable in the futur. Is the equity offer accretive ? you'll assess your answer with numbers. Options de la question 19 : Paragraph Lato (Recommended) 19px (Default) Warrant (estimated time 30 mn, 4,25 points) A company, 70% owned by its founder, issues warrants fully subscribed by a pool of financial investors. The warrants have a maturity of 3 years and investors can only exercise the warrants at the end of the third year (European call). The operation takes place at the beginning of year N. The operation's terms at the start of year N are as follows: - The PER is 20.4. The PER is assumed to remain stable over the 3 years. - EPS for year N is € 7. The business plan anticipates a growth of this EPS of 20% per year. - The company's Equity is made up of 8.5 million ordinary shares without double voting rights. - The company issues 5.1 million warrants. The warrant value at issuance is 5 €. The expected return for warrant holders is 10%. - The conversion ratio (subscription ratio) is 3 warrants for one (1) new share. The subscription price for a new share is € 170. Question 20 (0,5 points) Enregistré If we assume that the warrants are exercised at maturity date, how many shares will be issued? (in million) Round the result to one decimal place and do not write "million" in the answer box. Votre réponse: Options de la question 20 : Réponse Question 21 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 21 : Paragraph Lato (Recommended) 19px (Default) Question 22 (0,5 points) Enregistré If we assume that warrants are exercised at maturity date, what is the amount (in million €) raised by the company at maturity date? Round the result to the nearest integer and do not put the "€" symbol nor write "million" in the answer box. For example if you get a result of €345.623456 million then write 346 in the answer box. Votre réponse: Options de la question 22 : Réponse Question 23 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 23 : Paragraph Lato (Recommended) 19px (Default) Question 24 (0,5 points) Enregistré According to the assumptions, what is the target share value (post-money at the end of the 3 years =maturity date) enabling the exercice of the warrants? Round the result to two decimal places and do not put the "€" symbol in the answer box. Votre réponse: Options de la question 24 : Réponse Question 25 (0,5 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 25 : Paragraph Lato (Recommended) 19px (Default) Question 26 (0,5 points) Enregistré According to the assumptions, what will be the gain or loss (in €) for a holder of 3 warrants at maturity date ? Round the result to nearest integer and do not put the "€" symbol in the answer box. For example if you get a result of €61.023 then write 61 in the answer box. Votre réponse: Options de la question 26 : Réponse Question 27 (0,75 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 27 : Paragraph Lato (Recommended) 19px (Default) Convertible Bond (estimated time 30 mn, 6 points) A company issues a 5 million € of convertible bonds. The price issue, equal to the nominal value, of a convertible bond is €200. CB maturity is 3 years. These CB are bullet (in fine reimbursment). Convertible bonds will not be converted before the maturity date. The convertible bond carries a 2% cash coupon payment and a 4% PIK interest. the discounted rate for Pik coupon is 4%. Corporate bonds coupon rate, for a similar company size, company risk and bond maturity, is 7,5% The company's shares are equal to 1 Million. In the event of a conversion, the conversion ratio is : 1 convertible bond for 1 new share. The holder of the convertible bond has an expected return of 15%. Question 28 (0,5 points) Enregistré What is the amount of the yearly cash coupon paid for 1 convertible bond? Round the result to the nearest integer and do not put the "€" symbol in the answer box. Votre réponse: Options de la question 28 : Réponse Question 29 (0,7 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 29 : Paragraph Lato (Recommended) 19px (Default) Question 30 (0,5 points) Enregistré What is the amount of the PIK debt at maturity date (for 1 Convertible debt)? Round the result to two decimal places and do not put the "€" symbol in the answer box. Votre réponse: Options de la question 30 : Réponse Question 31 (0,7 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 31 : Paragraph Lato (Recommended) 19px (Default) Question 32 (0,5 points) Enregistré In case of non conversion, what would be the non-conversion premium enabling a convertible bond holder to meet the market coupon rate? in % of nominal value. Round the result to one decimal place. Votre réponse: Options de la question 32 : Réponse Question 33 (0,7 points) Enregistré Use the text edit box below to justify your answer and to provide your calculations. Options de la question 33 : Paragraph Lato (Recommended) 19px (Default) Question 34 (0,5 points) We assume that the company's share value at maturity date is equal to €260. What is the IRR (%) for one (1) convertible bond holder? Round the result to one decimal place and do not put the "%" symbol in the answer box. Votre réponse: Options de la question 34 : Réponse Question 35 (0,7 points) Use the text edit box below to justify your answer and to provide your calculations. Options de la question 35 : Paragraph Lato (Recommended) 19px (Default) Question 36 (0,5 points) According to your previous result, what will be the founder's % shareholding after convertible bonds maturity date? Round the result to the nearest integer and do not put the "%" symbol in the answer box. Votre réponse: Options de la question 36 : Réponse Question 37 (0,7 points) Use the text edit box below to justify your answer and to provide your calculations. Options de la question 37 : Paragraph Lato (Recommended) 19px (Default)
