Pearl, Inc. has offered $790 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $670 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger? Multiple Choice $126,000,000 $123,600,000 $-120,000,000 nnnnnnnn
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- Ch. 29. Calculating Synergy. The Left Foot Company has offered $426 million cash for the common stock in the Right Foot Company. Based on recent market information, the Right Foot Company is worth $389 million as an independent operation. If the merger makes economic sense for Holmes, what is the minimum estimated value of the synergistic benefits from the merger? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) Round to the nearest dollar and format as "XX,XXX,XXX"Firm A has a value of $100 million and Firm B has a value of $70 million. Merging the two would enable cost savings with a present value of $20 million. Firm A purchases Firm B for $75 million. What is the gain from this merger? $75 million $30 million $15 million $20 millionKoala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financial data for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected in this merger. Sales (millions) Net income (millions) Koala $90 $9.4 O a. $2.23 O b. $2.75 O c. $2.25 O d. $2.21 Laser $10 $1.2 Common shares outstanding (millions) 4.0 0.8 Earnings per share $2.35 $1.50 Common stock (price per share) $35.00 $27.00 Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange
- Calculating Synergy. The Left Foot Company has offered $426 million cash for the common stock in the Right Foot Company. Based on recent market information, the Right Foot Company is worth $389 million as an independent operation. If the merger makes economic sense for Holmes, what is the minimum estimated value of the synergistic benefits from the merger? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) Round to the nearest dollar and format as "XX,XXX,XXX"Mammoth Inc. is acquiring Snail Ltd. Mammoth's share price is $50 and Snail's share price is $10. Both firms have 1 million shares outstanding. Mammoth expects a discounted synergistic value of $5 million from the merging of operations of the two firms. If Mammoth pays cash of $11.5 million to Snail's shareholders, what is the value of the merged firm? $68.5 million $65.0 million $60.0 million $63.5 millionBoth of Firm A and Firm B are 100 equity firms. You estimate that the incremental value of the acquisition is $100,000. Firm B has indicated that it will agree to a sale if the price is $150,000, payable in cash or stock. Firm B is worth $100 as a stand-alone, so this is the minimum value that we could assign to Firm B. Should Firm A acquire Firm B? Explain 2 reasons of mergers. Firm A Firm B Price per share $2 $1 Number of shares 50,000 100,0000
- Calculation of Net Present Value of Net Cash Benefit from the Sock and Shoe Merger. The after-tax cash flow is $250,000 for 10 years. The cost of capital is 7%. Payment to Shoe's stockholders $1,100,000. Assumption of Shoe's debt is $300,000. What is the NPV of the merger? Group of answer choices $426,724.33 $355,895.39 $277,525.52 $655,895.47Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next. An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings. Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Dividends per share Common stock (price per share) $ +A Wilson $84 $21 8 $ 2.625 $ 2.00 $34 Blanchard $74 $9.0 6 Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the nearest cent. $1.50 $ 1.10 $15.00Pearl, Incorporated, has offered $434 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $402 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) Minimum synergistic benefit
- Both of Firm A and Firm B are 100 equity firms. You estimate that the incremental value of the acquisition is $100,000. Firm B has indicated that it will agree to a sale if the price is $150,000, payable in cash or stock. Firm B is worth $100 as a stand-alone, so this is the minimum value that we could assign to Firm B. Calculate the value of firm A after merger. Firm A Firm B Price per share $2 $1 Number of shares 50,000 100,0000Xterm R US has offered $178,500 cash for all of the common stock of Outdoor Co. Based on recent market information Outdoor Co is worth $174,200 as an independent operation. If the merger makes economic sense for Xterm R US, what is the minimum estimated value of the synergistic benefits from the merger? A)4300 B) 4730 C) 5160 D) 4000 E) 4945Pearl, Incorporated, has offered $197 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $178 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger?