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Merger Valuation
Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 6%, and the market risk premium is 7%.
Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $1.58 a share, but synergies will enable the dividend to grow at a constant rate of 7% a year (instead of current 5%). Harrison also plans to increase the debt ratio of what would be its Van Buren subsidiary; the effect of this would be to raise Van Buren's beta to 1.15. What is the per-share value of Van Buren to Harrison Corporation? Do not round intermediate calculations. $ (to 2 decimals)
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financial statement analysis project -- a comparative analysis of kohls corporation and j.c. penney corporationusing
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Winnebagel Corp. currently sells 29,700 motor homes per year at $81,500 each and 8,700 luxury motor coaches per year at $123,500 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 24,700 of these..
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