Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Dumb Jack Ltd. is considering making an offer to acquire Smart Smith Ltd. Before the announcement, Dumb Jack has a market value of $6 million and its shares are trading at $40 per share. Smart Smith has 50,000 shares outstanding with a share price of $15. Smart Smith can be acquired for $22 per share in cash or by exchange of stocks wherein Dumb Jack offers one of its share for every two of Smart Smith's shares. The value of Smart Smith to Dumb Jack is expected to be $1.6 million.
(a) What is the incremental value of the acquisition to Dumb Jack?
(b) Should Dumb Jack make a cash offer or a stock offer? Show all necessary calculations.
(c) Suppose the market currently estimates a 60 percent probability that Dumb Jack will go ahead with the acquisition with a stock offer. What will the market value of Dumb Jack be immediately after the announcement of the acquisition?
(d) At what exchange ratio of Dumb Jack shares to Smart Smith shares, would the shareholders in Smart Smith be indifferent between a stock offer and the cash offer? You don't need to consider the probability of acquisition in this part.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
This report is specific for a core understanding for Financial Accounting and its relevant factors.
Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.
Briefly describe the major differences between a sole proprietorship and a corporation
Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month
What are the implied interest rates in Europe and the U.S.?
State pricing theory and no-arbitrage pricing theory
Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.
The Effect of Financial Leverage and working capital management
Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.
Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.
Time Value of Money project
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd