User Account

All Pages

What should bigco expect to pay for privco per share

Assignment Help Accounting Basics
Reference no: EM132999543

Question - BigCo's Chief Financial Officer is trying to determine a fair value for PrivCo, a non-publicly traded firm that BigCo's is considering acquiring. Several of PrivCo's competitors, Ion International, and Zenon are publicly traded. Ion and Zenon have price-to-earnings ratios of 20 and 15, respectively. The Ion's and Zenon's earnings per share are projected to grow by 10% and 15% per annual, respectively. BigCo estimates that next year, PrivCo will achieve earnings per share of $4 per share and its earnings per share is expected to grow at 20%. To gain a controlling interest in the firm, BigCo expects to pay at least a 40% premium to the firm's estimated market value. What should BigCo expect to pay for PrivCo per share?

Reference no: EM132999543

Questions Cloud

Calculate the estimated total quality loss : Calculate the estimated total quality loss (cost) when the measured quality characteristic, x (e.g., circumference, measured in inches), is 83
Describe how the block-chain automates accounting : Question - Describe how the block-chain automates accounting. Provide at least three examples and sources
Describe this market using supply and demand : Describe the benefits and costs but leave the discussion of organ rationing and other solutions to the problems in this market for the next part
What amount should laguna report as investment in cavite : Cavite reported net income of P5,000,000 for 2021 and paid dividends of P1,500,000. In its December 31, 2021 balance sheet, what amount should Laguna report
What should bigco expect to pay for privco per share : BigCo expects to pay at least a 40% premium to the firm's estimated market value. What should BigCo expect to pay for PrivCo per share
Prepare the appropriate journal entry for lease on january : Assume that the first lease contract is a finance lease. Prepare the appropriate journal entry for this lease on January 1, 2020
How a swap can lead the exchange rate risk : Can you give me an example to explain that how a swap can lead the exchange rate risk to a swap bank?
What total amount of expenditures should be capitalized : Purchase storm windows and screens and their installation on all office windows 500,000. What total amount of expenditures should be capitalized
What is the price today : Today is the 17thA. $120.88C. $104.54D. $100.00E. Not enough information is available February 2006 and the prices of ½-year, 1-year and 1½-year strips (all $10

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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