O 1 75%AT&T LTE11:52 AMExit315.Loki, Inc. and Thor, Inc. have entered into astock-swap merger agreement wherebyLoki will pay a 39% premium over Thor'spre-merger price. If Thor's pre-mergerprice per share was $42 and Loki's was $51, what exchange ratio will Loki need tooffer?0.72 shares of Loki for each shareof Thor1.14 shares of Loki for each shareof Thor1.42 shares of Loki for each shareof Thor0.86 shares of Loki for each shareof Thor

Stock swap merger agreement refers to exchange of one equity based asset for the other. This is done…

Answered: O 1 75% AT&T LTE 11:52 AM Exit 31 5.…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 1P

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111. On June 30, 20X1, ABC Corp exchanged 6,000 shares of XYZ Company P10 par value ordinary shares for patent owned by McKing. The XYZ shares was acquired in 20X1 at a cost of P160,000. At the exchange rate XYZ shares had a fair value of P45 per share, and the patent had a carrying amount of P320,000 in McKing's books. ABC Corp should record the patent at: 320,000 270,000 180,000 160,000
A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: Minnie Corporation Mickey Corporation Total earnings $1,682,000 $2,581,000 Number of shares of stock outstanding 290,000 890,000 EPS $5.80 $2.90 P/E ratio 10X 20X Market price per share $58 $58 a. On a share-for-share exchange basis, what will the postmerger EPS be? (Round the final answer to 2 decimal places.) Postmerger earnings per share $ b. If Mickey Corporation pays a 25 percent premium over the market value of Minnie Corporation, how many shares will be issued? (Do not round intermediate calculations.) Shares issued shares c. With the 25 percent premium, what will the postmerger EPS be? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Postmerger earnings per share $
Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 39% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $42 and Loki's was $51, what exchange ratio will Loki need to offer? a. 1.42 shares of Loki for each share of Thor b. 0.72 shares of Loki for each share of Thor c. 0.86 shares of Loki for each share of Thor d. 1.14 shares of Loki for each share of Thor
4. The following table shows pre-merger data for ABC Company and XYZ, Inc. ABC XYZ No of share outstanding 2,000,000 5,000,000 EPS $2.50 $4.00 Price per share $15.00 $60 a) Assume XYZ is taking over ABC by issuing one of its shares for four shares of ABC. If there is no synergy, what would be the post-merger share price of XYZ? What would be the NPV of the merger? b) Assume there is synergy value of $4,200,000 created from the merger. What would be the post-merger price per share of XYZ? What would be the NPV of the merger? 5. Lazos Company is in distress mainly due to its failure to adopt the current technology. Creditors took Lazos to bankruptcy court and Lazos is fighting for a reorganization. The following is its condensed balance sheet. Book Value Market Value Current assets $ 120,000.00 $ 100,000.00 Machinery 200,000.00 150,000.00 Other fixed…
Firm E is going to acquire Firm F. The acquisition will be done via a share exchange, whereby Firm E will exchange 2.65 of its shares for every one of Firm F's shares. Synergy is $1,250,000 in total. Firm E has 350,000 shares outstanding trading at $35 each. Firm F has 45,000 shares outstanding trading at $84 each. What would the exchange ratio have to be for the NPV of the deal to be zero? Question 1 options: A) 3.13 shares of E for every 1 of F B) 0.41 shares of E for every 1 of F C) 3.15 shares of E for every 1 of F D) 2.40 shares of E for every 1 of F E) 3.19 shares of E for every 1 of F
7. ABC Company and XYZ Company have announced terms of an exchange agreement under which ABC will issue 10,000 shares of its P5 par value ordinary shares to acquire all of XYZ’s assets. ABC’s shares are trading at P28, and XYZ’s P10 par value shares are trading at P15. Historical cost and fair value statement of financial position data on January 1, 2021, are as follows: (see image below) Based on the information provided, what amount will be reported for Ordinary Share in the combined company’s statement of financial position immediately following the business combination?
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MC 5 P327On April 1, PP, Inc., exchanges P430,000 fair-value consideration for 70% of the outstanding stock of RR Corporation. The remaining 30% of the outstanding shares continued to trade at a collective fair value of P165, 000. RR's identifiable assets and liabilities each had book values that equaled their fair values of April 1 for a net total of P500,000. RR generated annual (12-month) revenues of P600,000 and expenses of P360,000 and paid no dividends. On a December 31 consolidated balance sheet, what should be reported as non-controlling interest?MC 6 P327-28January 1, 20x4, Payne Corp. purchased 70% of Shayne Corp's P10 par common stock for P900,000. On this date, the carrying amount of Shayne's net assets was P1,000,000. The fair values of Shayne's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P200, 000 in excess of the carrying amount. For the year ended December 31, 20x4, Shayne had net income of…
Finance Loki Inc. and Thor Inc. have entered into a stock swap merger agreement whereby Loki will pay a 35% premium over Thor’s pre-merger price. A. If Thor’s pre-merger price per share was $37 and Loki’s was $52, what exchange ratio will Loki need to offer? B. On the day of the merger announcement, the increase in Thor (the target firm’s) stock price will be ______(higher/lower) than 35% (the takeover premium). C. Based on your answer in part B of this question, explain why you think Thor’s stock price increase will be higher or lower than the takeover premium at the time of the merger announcement.
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 40,000 $ 15,000 Shares outstanding 20,000 20,000 Per-share values: Market $ 49 $ 18 Book $ 20 $ 7 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $4 per share. Assuming that neither firm has any debt before or after the merger, what are the total assets of Firm X after the merger?
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 95,000 $ 22,000 Shares outstanding 52,000 17,000 Pre-share values: Market $ 52 $ 21 Book $ 15 $ 10 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $6 per share, and that neither firm has any debt before or after the merger. a. Assuming the pooling of interests method is used, what is the equity of the combined firm? Equity value $ b. List the assets of the combined firm assuming the purchase accounting method is used. Assets from X $ Assets from Y Goodwill Total Assets XY $ Please dont provide solution image based thnx

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