What is the merger premium per share

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Question: Cavalier Enterprises has agreed to be acquired by The Fox Hunt for some ofThe Fox Hunt stock. The Fox Hunt currently has 3,300 shares of stock outstanding at a price of$32 a share. Cavalier Enterprises has 2,400 shares outstanding at a price of $26 a share. Thesynergy of the acquisition is $2,800.

a. What is the maximum price The Fox Hunt should pay for Cavalier Enterprises?

b. Suppose The Fox Hunt agrees to pay $65,000 worth of their stock to acquire CavalierEnterprises. What is the merger premium per share?

c. What is the value per share of The Fox Hunt stock after the acquisition? (Assume The FoxHunt can offer stock at its current price $32/share.

Reference no: EM133331700

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