You are evaluating the acquisition of a firm in your industry. You plan a 4-for-5 exchange of your shares for shares in the target. Assume the following data is available. Compute the value of the combined firm and the new price per share. Then determine the NPV of the stock offer. Acquiring VA ΝΑ PA S NSE Value of combined firm $ New price per share $ NPV of stock offer $ $180 10 $18 $19 4 Target VT NT PT $65 5 $13

You are evaluating the acquisition of a firm in your industry. You plan a 4-for-5 exchange of your shares for shares in the target. Assume the following data is available. Compute the value of the combined firm and the new price per share. Then determine the NPV of the stock offer. Acquiring VA ΝΑ PA S NSE Value of combined firm $ New price per share $ NPV of stock offer $ $180 10 $18 $19 4 Target VT NT PT $65 5 $13

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 7P

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