BAF409 Advance Corporate Finance Assignment

Reference no: EM133034206

BAF409 Advance Corporate Finance - Emirates College of Technology

Question #1:

Use the following data to calculate Cash collections and cash disbursements statement for Fun Toys Corporation: (0.25*32 = 8 Marks)

1) Expected sales by quarter (millions):
Q1: $300; Q2: $350; Q3: $200; Q4: $500
2) Beginning accounts receivable = $100
3) Collections = Beginning receivables + 80%× Sales
4) Accounts payable = 50% of sales
5) Wages, taxes, and other expenses = 10% of sales
6) Interest and dividends = $10 million per quarter
7) Major expansion planned for quarter 3 costing $100 million
8) Beginning cash balance = $20 million with minimum cash balance of $10 million

Question #2:

A. Compare between Mergers (Amalgamation) and Acquisition (Takeover) concepts?

B. Suppose your average inventory is $20,000, your average receivables are $10,000, and your average payables are $5000. Net sales are $90,000 and cost of goods sold is $60,000.

What are the operating cycle and the cash cycle?

Question #3:

In the following merger complete the Bootstrapping Earnings by calculating the missing numbers:

Assumptions are:
Exchange ratio: One share of Company One for three shares of Company Two
Market applies pre-merger P/E of Company two to post-merger earnings.

Attachment:- Advance Corporate Finance.rar

Reference no: EM133034206

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