User Account

All Pages

What is the cost of the acquisition to a

Assignment Help Business Management
Reference no: EM132564894

Company A is determined to report earnings per share of 267p. It therefore acquires Company B. There are no gains associated with the acquisition. In exchange for B's shares, A issues just enough of its own shares to ensure its 267p earnings per share objective.

Please find the following information:

Earnings Per Share: A: £2.00 B: £2.50

Price per Share A: £40 B: £25

Price-Earnings Ratio A: 20 B: 10

Number of Shares A:100,000 B:200,000

Earnings A:£200,000 B:£500,000

Market Value A:£4,000,000 B:£5,000,000

Required:

a) How many shares in the combined firm have to be offered for each share in B?

b) Derive the earnings per share, price per share, price-earnings ratio, earnings, and market value associated with the combined firm.

c) What is the cost of the acquisition to A?

d) What is the change in the market value of A's shares that were outstanding before the acquisition?

Reference no: EM132564894

Questions Cloud

Illustrates understanding of the movie from the perspective : Illustrates understanding of the movie from the perspective of Christianity. dentifies at least 3 differences between the movie plots
How research and ebp are different : How research and EBP are different; include how you believe research supports EBP for nursing. how research has evolved since the Florence Nightingale era.
Is modern culture ruining childhood : Is Modern Culture Ruining Childhood? Or What is important in our society is not portrayed through television shows that are popular in our society?
What evidence does draw on to develop the argument : How are styles politicized and racialized in popular culture through the civil rights era, according to Garofalo? Why does Garofalo focus on sound
What is the cost of the acquisition to a : It therefore acquires Company B. There are no gains associated with the acquisition. In exchange for B's shares
Why would dividend payout policy : Why would dividend payout policy not affect firm value in an ideal world? Explain and relate with finance theory.
What is charlie old monthly payment : Charlie bought his house 20 years ago, he is borrowed $285,000 with a 30-year mortgage with a 6.0% APR.
How much is her monthly payment : Willie borrowed $400,000.00 using a 30-year mortgage with an APR of 4.75%. How much will is Willie's monthly payment?
What is the apr on alexandria loan : If Alexandria borrows $55,000 at 9.5% for 5 years. What is the APR on Alexandria's loan?

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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