User Account

All Pages

What is the price per share of the combined corporation

Assignment Help Finance Basics
Reference no: EM132585650

Your company has earnings per share of $3. It has 1 million shares? outstanding, each of which has a price of $38. You are thinking of buying? TargetCo, which has earnings of $1 per? share, 1 million shares? outstanding, and a price per share of $28. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offered an exchange ratio such? that, at current? pre-announcement share prices for both? firms, the offer represents a 18% premium to buy TargetCo. ? However, the actual premium that your company will pay for TargetCo when it completes the transaction will not be 18%?, because on the announcement the target price will go up and your price will go down to reflect the fact that you are willing to pay a premium for TargetCo without any synergies. Assume that the takeover will occur with certainty and all market participants know this on the announcement of the takeover? (ignore time value of? money).

a. What is the price per share of the combined corporation immediately after the merger is? completed?

b. What is the price of your company immediately after the? announcement?

c. What is the price of TargetCo immediately after the? announcement?

d. What is the actual premium your company will? pay?

a. The price per share of the combined corporation immediately after the merger is completed will be ?$ nothing. ?(Round to the nearest? cent.)

Reference no: EM132585650

Questions Cloud

Get price control over customers : How can you as a (whole seller) get price control over your customers (retailers)
Explain the concept of management control : Explain the concept of management control and how budgeting is used as part of it. Describe the concept of zero-base budgeting.
How to determine the value of ending inventory : Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Searaya processes boat hulls into four products
What amount of maintenance cost will be allocated : What amount of maintenance cost will be allocated to each department based on budgeted usage for fixed operating costs and actual usage for variable operating
What is the price per share of the combined corporation : Your company has earnings per share of $3. It has 1 million shares? outstanding, each of which has a price of $38.
What is the npv and the irr : 1. What is Opportunity Cost and its role in the reasons that a firm must retain cash.
How much will jenny have in her account after : How much will Jenny have in her account after 17 years if she earns deposits$1,000 a month and earns an APR of 6%?
Discuss the four major categories of direct cost : How and why do we classify cost? Discuss the four major categories of direct and indirect cost and explain each. Give examples of each.
Jimmie bob long lost uncle past : Jimmie Bob's long lost uncle past away and put $500,000 in his will for Jimmie Bob. Jimmie Bob is 26 and he wants to save

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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