User Account

All Pages

What is the maximum exchange ratio

Assignment Help Accounting Basics
Reference no: EM133066950

Question - Pinder Ltd has announced a scrip(stock) offer to acquire Value Co. Pinder Ltd's shares are trading at $16 and there are 3 million shares of outstanding. Value Co's shares are trading at $5 and there are 1 million shares outstanding. Pinder Ltd estimates that the acquisition will incur integration costs of $200,000 per year for the first three years. Pinder Ltd expects to be able to reduce overlapping capital expenditures by $600,000 during the first ?ve years of the acquisition. The required rate of return for Pinder Ltd is 10%. Assume cash flows occur at the end of each year. Based only on the information above, what is the maximum exchange ratio that Pinder Ltd can offer before destroying shareholder value?

Reference no: EM133066950

Questions Cloud

Should a liability in the form of a provision be recorded : Should a liability in the form of a provision be recorded? How would it be measured and how should it be presented to financial statements users
Determine the amount of product costs : Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. b. LIFO
Policy for conducting IT audits and develop project plan : You must develop a policy for conducting IT audits and develop a project plan for conducting two-week IT audits.
How many shares of common stock are outstanding : Common Stock - $5 par, 500,000 shares authorized $380,000 and Retained Earnings 240,000. How many shares of common stock are outstanding
What is the maximum exchange ratio : Assume cash flows occur at the end of each year. Based only on the information above, what is the maximum exchange ratio that Pinder Ltd can offer
Preferences regarding the work environment : Assume that, on average, men and women have different preferences regarding the work environment. Suppose, for example, that while both women and men prefer bei
Find an example of economic announcement : Find an example of an economic announcement having a strong effect on the stock market. Your example need not be from the US, and it need not be current. Explai
Stages in the project lifecycle : The purpose of this assignment is to understand the early stages in the project lifecycle. Goals with identified key performance indicator
Theory of absolute advantage : Explain how the Theory of Absolute Advantage, Theory of Comparative Advantage and the Hecksher-Ohlin Theory determine what a nation should produce for trade

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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