User Account

All Pages

What is the merger premium over firm b stock price

Assignment Help Business Economics
Reference no: EM132412268

Two firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500.

Firm A Firm B

Number of Shares 10,000 7,500

Price per Share $25.00 $10.00

a) What is the merger premium over firm B's stock price?

b) What is the value of firm B to firm A?

c ) What is the NPV of the acquisition if cash is used?

d) What is the value of the post-merger firm following a cash acquisition?

e) What is the price per share of the post-merger firm following a cash acquisition?

f) What is the value of the new firm if firm B's stockholders are paid in stock?

g) How many shares will be given to firm B's stockholders in the stock-financed deal?

h) What will the price per share be of the post-merger firm if payment is made in stock?

i) What is the cost of acquisition when stock financing is used?

j) What is the NPV of the acquisition if stock financing is used?

Reference no: EM132412268

Questions Cloud

Calculate the bank discount and proceeds for the note : A newly married couple was given the opportunity to obtain a simple discount note with these following terms: $38,835 at 9% for 12 months.
Paper on seminal theories of governance and stewardship : Paper on seminal theories of governance and stewardship that inform effective organizational leadership in non-profit or forprofit organizations
Investing a penny of one own wealth : Using the MM propositions, demonstrate how to make a riskless profit from DD and PP without investing a penny of one's own wealth.
Case study of victoria industrial equipment corporation : Imagine Victoria Industrial Equipment Corporation (VIEC) located in Canada has an asset costs $675,000 at the beginning of the year.
What is the merger premium over firm b stock price : a) What is the merger premium over firm B's stock price? b) What is the value of firm B to firm A? c ) What is the NPV of the acquisition if cash is used?
BUS 311 Cross Cultural Management Assignment : BUS 311 Cross Cultural Management Assignment Help and Solution, Emirates College of Technology - Assessment Writing Service - Cultural Variation
Valuable concept or piece of information : Please identify and discuss the most valuable concept or piece of information that individuals should be learned from taking a Corporate Finance class
What is the value of the project : What is the value of the project? And what is the optimal strategy to use natural gas vs. coal?
What is the one share of this stock worth today : What is the one share of this stock worth today at the required return of 18.5 percent?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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