Offer value per share and offer premium

Assignment Help Finance Basics
Reference no: EM1327308

Garth's Micro Brewery, whose shares are currently trading at $40 per share, is considering acquiring Wayne's Beer Bottling Co. You have compiled a group of comparable transactions within the beer bottling space and have calculated that since 2004, acquisitions similar (or comparable!) to the one Garth's is currently considering have had transaction values (offer value of target plus any target debt, net of cash) that are, on average, 8.0x target's EBITDA.

Wayne's shares currently trade at $34 per share
Wayne's has 50 million diluted shares outstanding
Wayne's LTM EBITDA was $250 million
Wayne's Net Debt was $200 million

What is the offer value per share and the offer premium?

1. $32.33 per share; -4.9%
2. $36.00 per share; 5.9%
3. $44.00 per share; 29.4%
4. $52.94 per share; 55.7%

Reference no: EM1327308

Questions Cloud

Need of application system like sap : Need of application system like sap - 21 century application system like SAP, Oracle, people soft or JD Edwards?
Average variable prices are assumed to remain constant : If average variable prices are assumed to remain constant over a 10 percent increase in output, elucidate the effects of the proposed price cut on total profits.
Explaining the labour act of turkey : Summarize one law in Turkey and explain the difference or similarities to that of the United States law.
How do you pick the right system : Question about Computer System - how do you pick the right system
Offer value per share and offer premium : Garth's Micro Brewery, whose shares are currently trading at $40 per share, is considering acquiring Wayne's Beer Bottling Co. What is the offer value per share and offer premium?
How to research the development technologies : how to Research the development technologies below and type up a sum,mary of them.
Explain how much will your industry total revenues : Explain how much will your industry's total revenues (revenues from both products) change if you increase the price of good X by 1 percent.
Define international management : What is your definition of international management?
Pv and fv of an investment : You just received $225,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your aim is to retire 25 years from today.

Reviews

Write a Review

Finance Basics Questions & Answers

  Analysing characteristics of derivative markets

Analyse characteristics of derivative markets, by focusing on credit default swaps (CDS).

  Computation of effective annual yield bond value

Computation of effective annual yield bond value Assume that the 5-year bond paying $40 semi-annually is purchased at par

  Forbelts management wants to conclude

With profit maximization as a criterion, Forbelt's management wants to Conclude Elucidate how many motors should be produced at each plant also Elucidate how many motors should be shipped from each plant to each destination.

  Describe the term bond valuation

Describe the term Bond valuation and what coupon rate should be set on the bond with warrants if the total package is to sell for $1,000

  Computation of net present value

Computation of net present value and what is the NPV of this investment

  Calculation of various leverage

Calculation of various leverage and What is McFrugal's degree of operating leverage at a sales level of $20 million

  Computing dividend pay-out ratio

Computing dividend pay-out ratio and the company forecasts this year's net income to be $600,000

  Computing black-scholes price

Stock pays no dividends, and stock's annual volatility is 40%, then the Black-Scholes price for this option (rounded to the nearest cent) is?

  Computation of payback period

Computation of payback period and you expect that it will generate additional revenue of $500 per month

  Computation of value of the stock using constant growth

computation of value of the stock using constant growth model where The current risk-free rate of return is 5% and the market risk premium is 8%

  Explain capital budgeting decision based on npv

Explain Capital Budgeting decision based on NPV of the project and the cost of aerators is expected to increase at 4 percent per year far into the foreseeable future

  Investment analysis through incremental analysis

Investment Analysis through Incremental Analysis and compute the incremental net income of the investment for each year

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd