User Account

All Pages

What is the npv of the merger for global tours

Assignment Help Financial Accounting
Reference no: EM132957060

Global Tours is analyzing the possible acquisition of Eastern Vacations. Due to the improved efficiency, Global Tours estimates that the combined firm could save $600,000 of annual after tax cash flows for the indefinite future. An investment bank estimates that Global Tours and Eastern Vacations are worth $30m and $15m respectively. Global Tours uses 15% opportunity cost of capital to discount its incremental cash flows.

Problem a. What is the synergy from the merger?

Problem b. If Global Tours offers $16m cash for Eastern Vacations, what is the premium (cost) of the merger? What is the NPV of the merger?

Problem c. If Global Tours offers 35% of the combined firm to owners of Eastern Vacations, what is the premium (cost) of the merger? What is the NPV of the merger?

Reference no: EM132957060

Questions Cloud

Which alternative prefer if discount rate is eight percent : Your not-for-profit enterprise needs to acquire use of a building. Which alternative would you prefer if the appropriate discount rate is 8% per year?
Prepare the journal entries to close the income summary : They share remaining profits and losses in a 2:5:3 respectively, Prepare the journal entries to close the income summary
Find how much will be payments : Planning to buy a new home, You would take out 20 year mortgage with an apr of 3% compounded monthly. How much will be your payments?
What is the npv of acquisition if barrison offers one share : Barrison is investigating possible acquisition. What is the NPV of the acquisition if Barrison offers one share of Barrison for every two shares of Soulmaster?
What is the npv of the merger for global tours : Global Tours is analyzing the possible acquisition of Eastern Vacations, what is the premium (cost) of the merger? What is the NPV of the merger?
What is the expected net operating income : What is the expected net operating income, E(NOI), and the probability of an operating loss with the current technology? With the proposed technology
Find what is the npv of the acquisition for principal inc : Principal has 2.5 million shares of stock outstanding at market price. The synergy gains of the acquisition is $4.5 million. What is the NPV of the acquisition?
Which of the bonds has the smallest price risk : Which of bonds has the smallest price risk? A 5-year 5% annual coupon bond with a $1,000 maturity value./ 5-year zero coupon bond with a $1,000 maturity value.
What are newtons expected cash receipts : The company collects 5 0% of its credit sales in the month following sale, and 50% in the second month following sale. What are Newtons expected cash receipts

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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