ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18%. *How much is the value of synergy of the merger?
Q: Aji who is now 25 years old, wants to buy a retirement plan starting at the age of 55 year with an…
A: In the given question, the future value of annuity is $ 3,000,000. Annual Payments will be paid…
Q: question attached below. The answer is already provided, which means that will be your basis if your…
A: Given: Cost Of Vehicle = $ 55000 Salvage Value = $5000 Total service units = 250,000 miles, Usage…
Q: Bluejeans Company has an after-tax profit of P140,000. Bluejeans has a return on sales of 20% and…
A: Before tax profit = P140,000 / 70% = P200,000 Fixed cost = P100,000 Sales = P200,000 / 20% =…
Q: Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of…
A: A product purchasing budget is a plan that reflects the total predicted costs or item inventory…
Q: Classify the following costs of activity inputs as variable, fixed, or mixed. Identify the activity…
A: Variable costs are those costs which changes with change in activity level. Fixed costs are those…
Q: lo can i get help with something
A: All accounting related queries and question solutions are been provided.
Q: expense on short term debt should be based on projected balances and short term interest rates.…
A: Basic Concept of accounting
Q: 38. In preparing a comprehensive budget, one would start with the Group of answer choices a.…
A: The comprehensive budget is also known as Master Budget or Total Budget. It includes both recurring…
Q: Which account amount is the most important (larger) in the assets side and in the liabilities side…
A: Balance sheet is the summary of the financial position of the company on a particular date in which…
Q: Drape Corp. would like to market a new product at a selling price of P15 per unit. Fixed costs for…
A: Contribution margin per unit = P15 x 35% = P5.25
Q: Explain the below elements of cash outflows: a- Purchase of New Equipment. b- Investment in…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: ABC Company is the defendant in a patent infringement suit filed by XYZ Company in 2020. At Dec. 31,…
A:
Q: You are auditing the accounts receivable and the related allowance for bad debts account of AACA…
A: "Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Beginning inventory, purchases, and sales for Item 88-HX are as follows: Oct. 1 Inventory 86 units e…
A: LIFO: LIFO stands for Last-In, First-Out. In this method inventory purchased at last will be sold…
Q: Cost of equipment P1,200,000 Useful life of equipment 5 years Lease term 4 years Annual rent payable…
A: Concept of lease Accounting Sales type lease Accounting Calculation of Gross Investment in the…
Q: 3. Determine the semi-monthly pay for someone with an annual salary of $48 000.
A: Salary means the amount paid to worker or employee for the service rendered by that person. Annual…
Q: Required: a. Harbor computes ROI using beginning-of-the-year net assets. What will the divislonal…
A: ROI is the ratio between the Income and Cost of the Investment. A higher ROI means the company earns…
Q: The following is the simple regression results based on the data from Madrigal Corporation:…
A: Coefficient of determination [R2] measures the variability in percentage form of the dependent…
Q: An engineering analysis by net present worth (NPW) is to be made for the purchase of two devices A…
A: Net Present Worth: It is the difference between the present values of cash inflows and cash…
Q: The unit amount of three different production costs for Juanito Corporation, are as fol Production…
A: Cost X unit cost is same for both levels of production. Cost Y unit cost and total cost changes.…
Q: Question 2 Using the above information on Pamlico Manufacturing Ltd, prepare the statement of…
A: Income statement: Income statement has been drafted by a company to know about their profitability…
Q: Directions: For each situation, select one option you think will help increase profit. Put the…
A: There are various means to attract the customer. Also the company takes various steps to decrease…
Q: unit) shifted from 1500 yen to 1000 yen, the quantity increased from 350 units to 400 units. From…
A: 1)Here when the price is 1500 yen the quantity demanded is 350 units So the revenue here is =…
Q: Arturito Company was approached by the Jordan Brand to purchase 10,000 pairs of shoes for P550. The…
A: In the given question the company has the capacity to produce 50000 units. If it accepts the…
Q: Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,700,…
A: Solution a: Present value of increase in annual cash flows = $6,110 * PVA of 1 at 13% for 6 periods…
Q: When should a reversal of a goodwill impairment be recognised? a) © Immediately b) At…
A: Goodwill Impairment: Accounting charges are referred to as goodwill impairment when the carrying…
Q: Case study no. 1: A mumber of persons and/or companies decide to se cubscribed capital. Subsequently…
A: Subscribed capital refers to the sum value of shares that the investor intends to buy once they are…
Q: for the following damages: other driver, $25,000; passenger 1, $20,000; passenger 2, $9,000; other…
A: There are different types of auto insurance and depending on each plan there are different types of…
Q: Power Co.'s labor information for June is as follows: Direct labor hours worked 68,100 Standard…
A: Formulas: Direct Labor rate variance = (Actual rate per hour - Standard labor rate per hour)*Actual…
Q: Ortega Interiors provides design services to residential and commercial clients. The residential…
A: Net income / (loss) is the amount of money earned or incurred after deducting the outlays from the…
Q: If the residual income calculated for a division is a negative number, then which of the following…
A: Return on investment is the amount earned on the investment . Minimum required rate of return is…
Q: 3. A linking machine is purchased for 20,000. It is estimated to have a useful life of 10 years and…
A: Depreciation means the amount of expenses written off from the value of fixed assets used in…
Q: Discuss your insights about the FMEA
A: FMEA: Failure Modes and Effects Analysis (FMEA) is a method that is both systematic and proactive,…
Q: is earned in the previous year 2020-21. (1) Salary received from Govt. of India (He lived in…
A: In India, income taxation is determined by a person's residency status. An individual's residence…
Q: We assume that we have a secured a loan of $10,000 from a bank which will be paid in one year. The…
A: Loan: The duration of a loan, or the amount of time it takes for a loan to be repaid in full when…
Q: der why earnings managem dered important by many m= nanagement teams. Discuss
A: Earnings management is the practice of use accounting procedures to generate income reports that…
Q: 41 Problem No. 1 AACA Corporation was incorporated on Dec. 1, 2021, and began operations one…
A:
Q: Question 1 Aren plc has prepared the following budget for one of its products, the Gooner, for the…
A: Solution... Variable production overhead = 1,600,000 * 25% = 400,000 Variable production…
Q: REQUIRED Based on the cash book and bank statement of Joe Wilson ltd 1. Prepare an adjusted…
A:
Q: Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage…
A: Flexible budget amount for direct labor = Units produced*Standard direct labor hours*Standard rate…
Q: The double entry Non-current assets Case study no. 1: A VAT payer company has the following…
A: As per the guidelines, the answer to the first question has been provided. If you require answers to…
Q: Question. Please specify the journal entry and whose account it belongs to? Loan amount - 16,00,000…
A: A journal entry is used to record a business transaction in an organization's accounting records. A…
Q: WalangLabel Company is a liquor company, the business has not been performing well this last few…
A: Contribution margin ratio = Contribution margin per unit / Sales price per unit where, Contribution…
Q: On January 20, 2017 Deirdre Surf Shop, Inc. placed in service computer equipment with a basis of…
A: Placed in service is a point of time when an asset that can be depreciated for the use of…
Q: Crane Medical manufactures hospital beds and other institutional furniture. The company’s…
A: The question is based on the concept of Financial Ratios. Gross margin percentage is calculated by…
Q: ABC Company includes 1 coupon in each box of coffee it sells. A planner is offered as a premium to…
A: Answer - Calculation of the Net Premium Cost Particulars Amount Cost of Coffee P150…
Q: The following information applies to the questions displayed below.] Simon Company’s year-end…
A: Financial ratios help to summarise the accounting data, so that the information can be used by the…
Q: SHABNUM COSTATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 202 S'000 20X1 S'000 Assets Non-current…
A:
Q: On January 1, 2022, Angel Martinez and Lourdes Medina formed the M&M Partnership. Upon formation,…
A:
Q: Inn Corporation had 30,000 ordinary shares of NPA Company which were acquired during Year 2 for a…
A: Number of bonus shares = 30000 x 20%= 6000 shares Number of shares as on December 31, Year 3 =…
ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18%.
*How much is the value of synergy of the merger?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18% 1.) How much is the intrinsic value of the merged entity?Warehouse Stationary is planning on merging with Whitcoulls. Warehouse's will pay Whitcoulls's shareholders the current value of their stock in shares of Warehouse's Equipment. Warehouse's currently has 4,600 shares of stock outstanding at a market price of $31 a share. Whitcoulls's has 1,600 shares outstanding at a price of $38 a share. What is the value per share of the merged firm assuming there is no synergy?ABC and XYZ have total equity values of P5,000,000 and P10,000,000 respectively. If they merged, a total of 30,000 P500-par value shares may be issued. Each share can provide investors a rate of return of 18%, a growth rate of 3% and annual dividends of P78 per share for the first year. What is the total value of synergy that the merger will provide?
- A Corp. and B Company will be merging. Independently, A has forecasted annual earnings of P400,000 and overall return of 16%. On the other hand, B had dividends of P480,000 last year, an overall return of 15% and a payout ratio of 80%. Once combined, they will have a total equity value of P7,300,000. How much is the value of synergy between the two entities?Holmes, Inc., has offered $351,887 cash for all of the common stock in Watson Corporation. Based on recent market information, Watson is worth $216,796 as an independent operation. If the merger makes economic sense for Holmes, what is the minimum estimated value of the synergistic benefits from the merger?Parentis Ltd. has a value of $150million while the value of Sandis Ltd. is $70million. A merger between the two has just gone through and cost savings with a present value of $ 10million is expected to be achieved. Parentis Ltd. paid cash of $85million for the entire paid up capital of Company B.Requiredi. What is the value of the two firms after the merger? ii. Calculate the cost of the merger to the shareholders of Parentis Ltd.iii. What is the portion of the gain/loss due Parentis Ltd.’s shareholders?iv. From the perspective of the shareholders of Company A, is there an economicjustification for the merger?
- CBA Corp. is worth $15 million as a stand-alone firm. ABC Corp. has offered 350,000 shares valued at $50 each to acquire CBA. After the announcement, however, the price of ABC's shares falls to $45. What was the cost of the merger?Kunla Ltd and Cunta Ltd intend to merge. The following were observed just before the merger announcement. Kunla Ltd Cunta Ltd Market price per share GH¢ 400 GH¢200 Number of shares 2,000,000 1,000,000 Market value of firm GH¢ 800,000,000 GH¢ 200,000,000 The proposed merger will create GH¢50,000,000 in synergies. Kunla Ltd intends to pay GH¢ 130,000,000 cash for Cunta Ltd. What is the cost of the merger to Kunla Ltd? Compute the NPV of the merger. The managers of these firms have proposed to merge to diversify their activities and to reduce risk. Should you pay a premium for the merged firm? What convincing reasons can these managers give for the proposed merger? What roles do investment banks play in facilitating M&A deals?Consider the following data in relation to a proposed acquisition, where Firm B will take over Firm A in a horizontal takeover. Pre-merger Value A $550m Pre-merger Value B $420m Post-merger Value A + B $1,150m Cash Offer $580m Share Offer 52% of Shares in A + B Estimate the gains available from the merger. Estimate the value of the merger to firm A’s shareholders under both the cash and share offer. Estimate the value of the merger to firm B’s shareholders under both the cash and share offer. Which offer will predominate, cash or shares, if the shareholders of A are given the choice?
- Aussie Ltd is considering the acquisition of Kiwi Ltd. The values of the two companies as separate entities are $20 million and $10 million, respectively. Each firm has 2 million shares outstanding. Aussie estimates that by combining the two companies, it will reduce the selling and administrative costs by $150,000 p.a. in perpetuity with no change in risk. Assume the cost of capital for the new firm is 10% p.a. What is the total gain, in present value terms, from the merger? a. $500,000 b. $150,000 c. $1,500,000 d. $1,000,000 e. None of the aboveConsider a conglomerate, non-synergistic, merger between two firms ABC and XYZ. In a purely conglomerate merger, the post-merger firm value is the sum of the two pre-merger values because there is no synergy. ABC has a total current market value of $6 billion. ABC’s capital structure is composed of common stock and a 5-year zero-coupon debt with a face value of $2.5 billion, and its Black-Scholes volatility (σ) is 35% based on the firm as a whole. XYZ has a total current market value of $5 billion and a 5-year zero-coupon debt with face value of $ 3 billion and Black-Scholes (σ) volatility of 45%. The risk-free rate is 5%. (a) What are the current market values of debt and equity in ABC and XYZ? (b) What are the values of debt and equity after the merger if the correlation between the cash-flows of the two firms is 0.2? *Please show calculations so I can see where I made a mistake if I'm wrong thank youThere are only five companies in the market. Company B and Company D are planning to merge. Market shares of all the competitors are shown in the table below. Company Market share, %% A 4040 B 2525 C 1414 D 1212 E 99 Calculate the difference between the HHI value after the proposed merger and the initial value. Write the exact answer. Do not round.