What exchange ratio between the two stocks

Assignment Help Financial Management

Reference no: EM131528946

Harrods PLC has a market value of £133 million and 5 million shares outstanding. Selfridge Department Store has a market value of £35 million and 2 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods’s CFO concludes that the combined firm with synergy will be worth £183 million, and Selfridge can be acquired at a premium of £10 million. a. If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge, what will the stock price of Harrods be after the acquisition? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) New stock price £ b. What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer of £45 million? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Exchange ratio to 1

Reference no: EM131528946

Questions Cloud

What is the synergy from the merger : What is the synergy from the merger? What is the cost to Fly-By-Night of each alternative?

Identify your organization core competencies : Examine your organization's core competencies based on established definitions. Include a rationale for the selection of these core competencies

What is the data redundancy : Identify and discuss the serious data redundancy problems exhibited by the file structure shown in Figure.

Prepare a proposal to conduct an in-depth study : Prepare a proposal to conduct an in-depth study of consumer behavior to analyze the market for their new flavored cigarettes.

What exchange ratio between the two stocks : What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer of £45 million?

Differentiate between public and private policing : Write a 700- to 1,050-word paper that describes the various judicial systems and related aspects of the security profession

Estimated value of the synergistic benefits from the merger : If the merger makes economic sense for Holmes, what is the minimum estimated value of the synergistic benefits from the merger?

Describe the survey technique such as telephone : Describe the survey technique, such as telephone, online-survey, mail, face-to-face, or interviews, by which the interviews might be delivered.

Discuss the serious data redundancy problems : Looking at the EMP_NAME and EMP_PHONE contents in Figure, what change(s) would you recommend?

User Account

All Pages