What is per share value of vandell to hastings corporation

Reference no: EM131979699

Question: Hastings estimates that if it acquires Vandell, interest payments will be $1.5 million per year for 3 years, after which the current target capital structure of 30% debt will be maintained. Interest in the fourth year will be $1.472 million, after which interest and the tax shield will grow at 5%. Synergies will cause the free cash flows to be $2.5 million, $2.9 million, $3.4 million, and $3.57 million in Years 1 through 4, respectively, after which the free cash flows will grow at a 5% rate.

1) What is the unlevered value of Vandell, and what is the value of its tax shields?

2) What is the per share value of Vandell to Hastings Corporation? Assume that Vandell now has $10.82 million in debt.

Reference no: EM131979699

Questions Cloud

Con?dence interval for the population mean : Con?dence interval for the population mean is from to (Round to two decimal places as needed. Use ascending order.)

Con?dence interval estimate lor the population mean : A random sample of n = 9 values taken from a normally distributed population with a population vadance of 3G resulted in The sample values shown below

Contrast simple linear regression and multiple regression : Please define, compare, and contrast simple linear regression and multiple regression.

Average difference between appraisers : Construct a 95% confidence interval to estimate the average difference between appraisers. make a sentence or two using your result.

What is per share value of vandell to hastings corporation : Hastings estimates that if it acquires Vandell, interest payments will be $1.5 million per year for 3 years, after which the current target capital structure.

Intent of creating an activity network diagram : A PRIMARY intent of creating an Activity Network Diagram is to A. Identify non-value-adding activities

What is the company tax rate : Heavy Metal Corp. is a steel manufacturer that finances its operations with 40% debt, 10% preferred stock, and 50% equity. The interest rate on the company's.

How much would a person save with the hmo : A health insurance policy pays 85 percent of physical therapy costs after a $480 deductible. In contrast, an HMO charges $29 per visit for physical therapy.

What is organizations business debt after debt is paid off : A healthcare organization has the following financial information available in a balance sheet: Assets: Chas $10000, AR $5000, Machinery and Equipment $50,000.

User Account

All Pages