Estimate the cost of this acquisition to the shareholders

Assignment Help Financial Management

Reference no: EM131360784

In July 2007, News Corp. entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for $60 per share. Immediately prior to the News Corp. bid, the shares of Dow Jones traded at $33 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of interest-bearing liabilities on the balance sheet of Dow Jones was $1.46 billion.

a. Estimate the cost of this acquisition to the shareholders of NewsCorp.

b. What value did News Corp. place on the control of Dow Jones and Company?

Reference no: EM131360784

Questions Cloud

Face value and market value of that zero-coupon bond : An insurance company must make payments to a customer of $10 million in 1 year and $4 million in 5 years. The yield curve is ?at at 10%. What must be the face value and market value of that zero-coupon bond?

According to the duration concept : According to the duration concept

List of prices for zero-coupon bonds of various maturities : Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1000 Par Bond (Zero-Coupon) If at the end of the ?rst year the yield curve ?attens out at 8%, what will be the 1-year holding-period return on the coupo..

What is paper express market value per share : Paper Express Company has a balance sheet which lists $85 million in assets, $40 million in liabilities, and $45 million in common shareholders' equity. It has 1,400,000 common shares outstanding. The replacement cost of the assets is $115 million. T..

Estimate the cost of this acquisition to the shareholders : In July 2007, News Corp. entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for $60 per share. Immediately prior to the News Corp. bid, the shares of Dow Jones traded at $33 per share. Estimate the cost of th..

Maximum amount that you are willing to pay for the oil well : An associate of yours is offering your firm to buy an oil well that will produce 1,000,000barrels of oil next year. Assume for simplicity that the oil is available at the end of theyear. The well will be closed forever after that. What is the max..

The yield on the bond declines : You have an obligation to pay $1,488 in four years and 2 months. In which bond would you invest your $1,000 to accumulate this amount, with relative certainty, even if the yield on the bond declines to 9.5% immediately after you purchase the bond?

What is the percentage change in the bond price : A 9-year bond has a yield of 13.5% and a duration of 8.63 years. If the MARKET yield changes by 60 basis points, what is the percentage change in the bond’s price? Is this an increase or decrease?

User Account

All Pages