6 Your firm purchases goods from its supplier on terms of 1/10, net 30. The effective annual cost to your firm if itchooses not to take advantage of the trade discount offered is closest to:O 16.8%44.6%O 20.1%13.0 % Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share.Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million sharesoutstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. Thereare no expected synergies from the transaction.If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offerrepresents a 20% premium to buy Associated Steel, then the price per share of the combined corporation after themerger will be closest to:O $18.1O $21.5O $19.1O $17.5

Hi student Since there are multiple questions, we will answer only first question. Trade credit is…

Your firm purchases goods from its supplier on terms of 1/10, net 30. The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered is closest to: 16.8 % 44.6% O 20.1% 13.0 %

Your firm purchases goods from its supplier on terms of 1/10, net 30. The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered is closest to: 16.8 % 44.6% O 20.1% 13.0 %

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 10MC

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Concept explainers

Trade Credit

Answer- a- Before Shipping of goods

Question

Your firm purchases goods from its supplier on terms of 1/10, net 30. The effective annual cost to your firm if it
chooses not to take advantage of the trade discount offered is closest to:
O 16.8%
44.6%
O 20.1%
13.0 %

Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share.
Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares
outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There
are no expected synergies from the transaction.
If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer
represents a 20% premium to buy Associated Steel, then the price per share of the combined corporation after the
merger will be closest to:
O $18.1
O $21.5
O $19.1
O $17.5

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