Per share to the controlling shareholder

Assignment Help Financial Management

Reference no: EM131978852

You are the CEO of a private company and want to buy it. There is one major shareholder who owns 70 percent of the firm. The remaining 30 percent is held by oceanic shareholders. Based on a DCF model, you estimate the base value of the firm to be $100 million. This excludes any liquidity discount and/or control premium. Based on your observations of the market, liquidity discounts are about 30 percent and control premiums are about 15 percent for similar deals. Your firm has 80 million shares outstanding. What would you offer to pay in total and per share to the controlling shareholder? To the oceanic shareholders? What if it were not a private company but a public company. Show how would that change your calculation and answers?

Reference no: EM131978852

Questions Cloud

What is the sharpe ratio of the tanglewood fund : What is the Sharpe ratio of the Tanglewood Fund? What is the Sharpe ratio of your new portfolio?

Funds for number of companies and wealthy clients : Innis Investments manages funds for a number of companies and wealthy clients. Formulate a Linear Programming model to determine optimal investment amounts.

Challenges of balancing a global workforce : Describe the elements to a competitive and desirable total rewards system and How will this concept assist a company to achieve their strategic goals

Construct two alternative financing plans : Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 80 percent of assets financed by long-term sources.

Per share to the controlling shareholder : Your firm has 80 million shares outstanding. What would you offer to pay in total and per share to the controlling shareholder?

What return has the bondholder earned : Suppose that one year later the bond still yields 2.0%. What return has the bondholder earned over the 12-month period?

Calculate the market risk premium : Grokster Investment analysts have determined the market rate of return to be 8.7%. In evaluating investments over a 20 year time horizon.

Finding the standard deviation of the rate of return : Using an annual correlation of 0.3, calculated the standard deviation of the rate of return on this investment if you have a project that has a 0.7 chance.

What is the pv of the future salary payments : Growing annuities Mike Polanski is 30 years of age and his salary next year will be $40,000. Mike forecasts that his salary will increase at a steady rate of 5%

User Account

All Pages