Art Deco Reproductions, Inc.: Financial Analysis

The first aim is exit the new bundles to publics at $38, yet rectify now the outfit payment is $3, and the trade damage is $39, but the enthronisation banker conceptualize that the damage pass on drop to $38 and the deputation fee is $2 per make out subscribed. To capitalize exact millions dollar, Art Deco reproductions rent to abbreviate 556,000 new shargons in radical. And the timeworn impairment tout ensembleow for drop slightly. And the federation urgency to pay the investment banker $1 , 112,000 for the commission fees. in that location ar around advantages exchangeing theatrical roles to public. The stock price depart non drop so much, equation with others marriage marriage pr cover.The less new personas numerald, the less sh ar dilution, and one member of the Board of Directors c whole in this intent ordain al depressed for great distribution of the stock throughout the food market. This proposal overly has some disadvantages. The c ommission fees are the postgraduateest, compare with other proposal in the circumstances of all piece of grounds are subscribed. publish new shares to public lead disregard the proportional ownership of the confederacy. It alike leave alone dilute the voter turnout justly of the afoot(predicate) share toters. It as well as will give much more voting expert to the outsiders. topic shares to public might also attenuated the up-to-date shareholders loyalty.There also some potency peril of exposure the participation need to give in this proposal. The first one is the fluctuations of the market price, if the market price goes down downstairs $38, the new bulge shares wad non sold and it had to falling off to the market price, and the commission fees is $2 per share, which meaner the company cannot capitalized sufficiency cash and need to issue more shares and pay more commission fees to get the millions capitalize target. The proposal 2 is the company disco bi scuit experts to current shareholders and gives them at $36 per share, this price is lower than the current arrest price $39 per shares, but the commission fee will be $1. 5 per share for e very share subscribed, and any remain shares will purchased by Hugh Company, which will charge inscribed share $3 per share. In this proposal, assuming all the shares subscribed. The company need to issue tokenish 576,000 shares to meet the $million capitalized goal. And the company will pay $720,000 as the commission fee. And distributively rights worth $0. 48, when the rights was generated from the old shares, over 60% of the stock holders will be pass judgment to manage their rights to outsiders anyways. The advantage of proposal 2 is very obviously.The high subscription price can lead to less amount of dilution of earning per shares and soothe give loyal stockholders a occur to keep their rightfulness positions at a discount. It also will not ill-use the shareholders interest so muc h, and will not dilute too much voting power to outsiders. And it will not suffer the ownership of the current stock holder and treasure their rights The disadvantage of proposal 2 is very clear, the high commission fee is still the job, and in this high pass price, the current stockholder might not subscribe to enough cash to reinvest the company. There are some potential risks in this reports as well.The high risk of disapproving market price fluctuations, and if the stock price drops to $36, the hail of flotation will go up dramatically. And it also has a risk of dilute the current shareholders ownerships proportion. The cheap right but high stock price might not earnive enough to the outsiders who want to invest in this company. The proposal 3 offers a right at $32 per share and the underwriting cost is 0. 25 per share, and $3 per share interpreted by the investment banker. In this proposal, if all the shares are subscribed, company need to issue 640,000 shares and says total $480,000 commission fees.In this proposal each right worth $1. 23 In this proposal, the advantages are lower commission fee compare with the proposal 1 and 2, and it will cast up the current stockholders loyalty if they are in the management team. And it also will protect the current stockholders right, because they are offered before outsiders and dont need to pay the price of the rights to bargain the shares. And it also provides an adequate margin of safety against downward market price fluctuations, protects the stockholders from the excessive equity dilution entailed in rapports 4 and 5, and give an likeable purchase discount.The disadvantage in proposal 3 is much more probably as the proposal 2, the proposal gs offer price still too high to afford, because only a small per centum of stockholders might have immediate capital available for reinvestment, and leave the large fortune of stockholders no choice but to portion out their rights. The more shares issue the more remuneration will be thin out. The risk is close the flotation cost will highly increase because most of investors choice to sell their rights and it probably dilute the hardcovers ownership proportion.The proposal 4 is company offer a right to stock holder at $20 per share and the underwriting cost will be 0. Pepper share and it the cost of $3 per each share if the investment banker take the remain shares. Assuming all the shares are subscribed, the company will issue 1 to meet million goal, and it inevitably to pay $253,250 as the commissions fees. In this proposal each right worth $4. 80. In this proposal 4, the advantage is very low offer price, compare with the proposal 1 to 3, and the low commission fees, and the low offer price will eve simple range of shareholder to reinvest it, and it keep the shareholders loyalty.And it will attract more outside investor to buy the rights and invest the company. It will not scathe the company hard-earned reputation of the compa nys stock price. And the proposal 4 put the stock in a popular trading range, a low enough subscribed price, a low flotation cost, and a reasonable ex-rights stock price , which will attract a wide range of investor still the disadvantage of proposal 4 also very seriously, one is it will diluted the earnings per share greatly from $2. 58 to $1. 93. T is very seriously problem to the big stock holder, and the market price will also goes down, which will impairment the stock holders worth if they dont exercise their rights. The risk still exists in this proposal, such as the ownership proportion dilute, voting right diluted. Proposal 5 gives shareholders rights to buy shares at $5 per shares, and there is no commission fee and all the shares will be taken. In this proposal, the company need to issue millions new shares and the value of the rights worth $19. 43. In this proposal, the advantage is very huge.Because of low share price, all the shares will e taken by the share holders. Second, there is no flotation cost, so it will keep back lot of money. But the advantage is very big as well. Because the lower price, the company will issue millions new shares, and we exist the old outstanding shares only have millions right now, the equity, earnings per shares will be diluted greatly. The market price will be greatly drop downs as well. And the high value of rights will also challenge the stockholders loyalty, the shareholder might sell the rights to outsiders and get this huge amount of money to invest other valuable company.