Assuming the following facts, what is the value of XYZ Corporation to JKL Enterprises? XYZ's post-merger cash flows in Years 1-3 are estimated to be $7 million, $10 million, and $12 million, respectively. In addition, its continuing value in Year 3 is $318 million. The firm's cost of equity is 10%, and its growth rate is 6%. ($262.56 million)

Assuming the following facts, what is the value of XYZ Corporation to JKL Enterprises? XYZ's post-merger cash flows in Years 1-3 are estimated to be $7 million, $10 million, and $12 million, respectively. In addition, its continuing value in Year 3 is $318 million. The firm's cost of equity is 10%, and its growth rate is 6%. ($262.56 million)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...

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Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net income of $40 million. Included in the income was interest expense of $2,800,000. The companys tax rate was 40%. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon?
Assuming the following facts, what is the value of XYZ Corporation to JKL Enterprises?XYZ’s post-merger cash flows in Years 1–3 are estimated to be $7 million, $10 million,and $12 million, respectively. In addition, its continuing value in Year 3 is $318million. The firm’s cost of equity is 10%, and its growth rate is 6%.
The market value of the equity of Thompson, Inc., is $582,000. The balance sheet shows $21,000 in cash and $192,000 in debt, while the income statement has EBIT of $93,000 and a total of $137,000 in depreciation and amortization. What is the enterprise value-EBITDA multiple for this company?
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?
The value of Broadway-Brooks Inc.'s operations is $900 million, based on the free cash flow valuation model. Its balance sheet shows $70 million in accounts receivable, $50 million in inventory, $30 million in short-term investments that are unrelated to operations, $20 million in accounts payable, $110 million in notes payable, $90 million in long-term debt, $20 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stock's price per share? a. $28.40 b. $31.24 c. $34.36 d. $25.56 e. $23.00
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Based on the corporate valuation model, the value of a company's operations is $1,700 million. The company's balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short - term investments that are unrelated to operations. The balance sheet also shows $90 million in accounts payable, $230 million in notes payable, $700 million in long-term debt, $130 million in preferred stock, $180 million in retained earnings, and $800 million in total common equity. If the company has 40 million shares of stock outstanding, what is the best estimate of the stock's price per share?