User Account

All Pages

What is the value of target to acquirer

Assignment Help Business Management
Reference no: EM132828163

Acquirer Inc. wants to acquire Target Corp. Acquirer expects the acquisition to increase its cash flow from assets by $4 million per year forever, in addition to the cash flow from assets from Target. The relevant discount rate for the incremental cash flows is 16%.

Both firms are purely equity financed. Acquirer has 50 million shares outstanding and a market value (of equity and assets) of $200 million, while Target has a market value of $100 million.

Acquirer has to decide if they should offer $108 million in cash or 59% of its stock for Target. Ignore tax effects.

a) How large is the synergy from the merger (in $ million)?

b) What is the value of Target to Acquirer (in $ million)?

c) What is the NPV of the cash offer (in $ million)?

d) What is the market value of the merged firm after the acquisition for cash (in $ million)?

e) What is Acquirer's stock price after the acquisition for cash?

f) What is the cost of the acquisition for stock (in $ million)?

Reference no: EM132828163

Questions Cloud

Make the journal entry on august to record the issuance : Make the journal entry on August 1, 2021 to record the issuance of the bonds with detachable warrants by National. Prepare the journal entry on March 15, 2023
Prepare the journal entry to record the purchase of the bond : Prepare the journal entry to record the purchase of the bonds on 1/1/21. Prepare the journal entry to record the interest payment on 12/31/21.
What would your strategy for research on customer look like : Suppose you are introducing a new type of exercise equipment to the fitness industry. What would your strategy for research on the customer look like?
Submit a new income statement applying the accrual income : Problem - Cash Flow Income vs. Accrual (GAAP) Income - Using EXCEL submit a new income statement applying the accrual income (GAAP) principles
What is the value of target to acquirer : Acquirer Inc. wants to acquire Target Corp. Acquirer expects the acquisition to increase its cash flow from assets by $4 million per year forever
Write an essay explaining the issue and offering solution : Write an essay explaining the issue and offering your solution. You must be arguable; include sources that you disagree with.
Determine the amount of gain or loss on the bond retirement : Determine the amount of gain or loss on the bond retirement. Prepare the journal entries to record interest in on December 31, 2021 and 2022.
What is dons estimated annual premium : He is entitled to a 12 percent estimated premium discount. What is Don's estimated annual premium for his workers compensation policy
What is anheuser stock price after the acquisition for cash : Anheuser has to decide if they should offer $277 million in cash or 31% of its stock for Busch. Ignore tax effects.

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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