Bundle: Fundamentals Of Financial Management, 15th + Mindtap Finance, 2 Terms (12 Months) Printed Access Card
15th Edition
ISBN: 9781337609838
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Question
Chapter 21, Problem 6P
a.
Summary Introduction
To Determine: The appropriate discount rate for valuing the acquisition.
Introduction: A merger is the mix of two organizations into one by either shutting the old entities into one new entity or by one organization engrossing the other. In other terms, at least two organizations are united into one organization to form a merger.
b.
Summary Introduction
To Determine: The continuing value.
c.
Summary Introduction
To Determine: The value of Company GC to Company TCI .
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Students have asked these similar questions
Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financial
data for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected in
this merger.
Sales (millions)
Net income (millions)
Koala
$90
$9.4
O a. $2.23
O b. $2.75
O c. $2.25
O d. $2.21
Laser
$10
$1.2
Common shares outstanding (millions) 4.0
0.8
Earnings per share
$2.35
$1.50
Common stock (price per share) $35.00
$27.00
Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange
Multiple Choice
MC.05-51
In 2014, Dallas Company had sales of $600,000; cost of sales of $430,000; interest expense of $12,000; and a gain on the sale of a component of $52,000; For its income statement, Dallas uses the single-step format and the all-inclusive concept. What was Dallas's reported pretax income from continuing operations?
*$158,000
*$170,000
*$118,000
*$150,000
Consider the following information about Firm A and Firm T:
Item
Firm A (Acquiring firm)
Firm T (Target firm)
Price per share
$20
$15
Outstanding shares
50
25
Total market value
$1000.00
$375
Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the NPV of the acquisition to firm A?
Select one:
a.
$1075.00
b.
$575.00
c.
$425.00
d.
$555.00
Chapter 21 Solutions
Bundle: Fundamentals Of Financial Management, 15th + Mindtap Finance, 2 Terms (12 Months) Printed Access Card
Ch. 21 - Prob. 1QCh. 21 - Prob. 2QCh. 21 - Prob. 3QCh. 21 - In the spring of 1984, Disney Productions stock...Ch. 21 - Prob. 5QCh. 21 - VALUATION Visscher currently expects to pay a...Ch. 21 - MERGER VALUATION Hastings estimates that if it...Ch. 21 - MERGER BID On the basis of your answers to...Ch. 21 - Prob. 4PCh. 21 - CAPITAL BUDGETING ANALYSIS The Stanton Stationery...
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