What theoretical share price share for share exchange, Financial Management

Assignment Help:

What theoretical share price share for share exchange

Establish what theoretical share price may be after the merger in a share for share exchange incorporating the effects of synergy. Adopt the 5 steps listed below:

Step 1	Calculate market values of both the companies before the merger i.e. no. of shares x share price.
Step 2	Calculate synergy effects; this generally involves future cash flows and discounting.
Step 3	Add step 1 and step 2 to give total market value for both companies.
Step 4	Establish the new number of shares that will exist after the merger.
Step 5	Calculate new share price step 3 / step 4.

Related Discussions:- What theoretical share price share for share exchange

Dividend payout ratio, Dividend Payout Ratio The percentage of earnings...

Dividend Payout Ratio The percentage of earnings or profit paid to shareholders in dividends. Computed as: The payout ratio gives an idea about how well earning

What is business risk, What is Business risk It is related to response ...

What is Business risk It is related to response of the firm's earnings before taxes andinterest, or operating profits, to changes in sales. When cost of capital is used to eval

Explain the structure of financial systems, Explain the structure of financ...

Explain the structure of financial systems In direct finance borrower-spenders borrow funds straight from lenders in the financial markets by selling them securities. In indire

Default risk, Default risk is the risk that arises when the iss...

Default risk is the risk that arises when the issuer is not able to satisfy the terms and conditions of the obligation with respect to timely pa

CAPM, ne

Assignment, Hi, what is your time limits on providing solutions

Hi, what is your time limits on providing solutions

Hedging, how does "x" company hegde itself? the company name will be shared...

how does "x" company hegde itself? the company name will be shared later.

Discounted cash flow, Discounted Cash Flow A technique used to present...

Discounted Cash Flow A technique used to present a forecasted stream of future cash flows in conditions of its present value, or its value in today's dollars. Discounted cash

Global Financial Management, #compare forward vs. backward internalization....

#compare forward vs. backward internalization.

Eurobonds, The term 'Eurobonds' refers to bonds issued and sold outsi...

The term 'Eurobonds' refers to bonds issued and sold outside the home country of the currency. For example, a dollar denominated bond issued in the UK is a Euro (

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages