Advanced Financial Management (Custom Package)
Advanced Financial Management (Custom Package)
17th Edition
ISBN: 9781323539439
Author: LOYOLA UNIV.
Publisher: PEARSON
Question
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Chapter 18, Problem 18.3WUE

a)

Summary Introduction

To determine: The ratio of exchange

b)

Summary Introduction

To determine: The number of shares W Company should issue.

Introduction:

Stock swap transaction

The exchange of one equity based assets with other is termed as stock swap. This occurs when the targeted firms’ shareholders equity is transferred with the acquiring firms shares.

c)

Summary Introduction

To determine: The earnings per share (EPS).

Introduction:

Stock swap transaction

The exchange of one equity based assets with other is termed as stock swap. This occurs when the targeted firms’ shareholders equity is transferred with the acquiring firms shares.

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Nemesis, Incorporated, has 136,000 shares of stock outstanding. Each share is worth $110, so the company's market value of equity is $14,960,000.   Suppose the firm issues 17,000 new shares at the price of $110, what will the effect be of this offering price on the existing price per share?             Suppose the firm issues 17,000 new shares at the price of $99, what will the effect be of this offering price on the existing price per share?           Suppose the firm issues 17,000 new shares at the price of $82, what will the effect be of this offering price on the existing price per share?
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