Xterm 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) 4945
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Xterm 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) 4945
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- Koala 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 exchangePearl, 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 $-120,000,000Prior to a potential merger Veggie Co has 4400 shares outstanding at a market price per share of $34.50. Fruits Inc 2300 shares outstanding at $30.50 per share. Assume Veggie Co has estimated the value of the synergistic benefits from acquiring Fruit to be $5600. Neither firm has outstanding debt. The acquiring firm has offered a price of $32.75 per share to the target. If the deal goes through, what is the NPV of the acquisition? A) 425 B) 225 C) 1050 D) 900 E) 575
- Holmes, Inc., has offered $351,887 cash for all of the common stock in Watson Corporation. Based on recent market information, Watson is worth $216,796 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?Prior to a potential merger Ross Co has 4500 shares outstanding at a market price per share of $31. Bulbs Inc has 2,800 shares outstanding at $18 per share. Assume Ross Co has estimated the valueof the synergistic benefits from acquiring Bulb Inc to be $3,500. Nowther firm has outstanding debt. The acquiring firm offered a price of $19.75 per share to the target. If the deal goes through, what is the merger premium? A) 4900 B) 3500 C) 2800 D) 6125 E) 0Ch. 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"
- Pearl, 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?Consider the following information about Firm A and Firm T: Item Firm A (Aquiring Firm Firm T (Target Firm Price/share $20 $15 Outstanidng shares 50 25 Total market value $1,000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the merger premium? Select one: a. $135.00 b. $125.00 c. $175.00 d. $150.00Croatia Inc. is in the process of acquiring Vistara Inc. on a share exchange basis. The information related to the two companies is provided below. Profit after tax Shares outstanding Earnings per Share PE Ratio EPS and Croatia Inc. $14,000,000 1,500,000 $8 15 As an analyst of Croatia Inc., you are required to calculate the following: Pre-Merger Market Value per Share of both companies. The maximum share exchange ratio Croatia Inc. can offer without the dilution of: Market Value per Share Vistara Inc. $6,000,000 1,600,000 $5 10 Note: Do not round off any intermediate calculations. Only the rations shall be rounded off up to four decimals. (1) Pre-Merger MV: Croatia Inc- $50. Vistara Inc. = $120.(1) (1) 0.6250 (2) 0.4167 (1) Pre-Merger MV: Croatia Inc. $120. Vistara Inc = $50. () (1) 0.6200 (2) 0.4221 (1) Pre-Merger MV: Croatia Inc.= $120, Vistara Inc. $50 (1) (1) 06250 (2) 04167 (1) Pre-Merger MV: Croatia Inc.= $110, Vistara Inc. = $120.) (1) 0.6200 (2) 0.4221
- Consider the following information about Firm A and Firm T: Item Firm A (Acquiring firm) Firm T (Target firm) Price per share $20 $15 Outstanding shares 50 25 Total market value $1000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the NPV of the acquisition to firm A? Select one: a. $1075.00 b. $575.00 c. $425.00 d. $555.00Kunla Ltd and Cunta Ltd intend to merge. The following were observed just before the merger announcement. Kunla Ltd Cunta Ltd Market price per share GH¢ 400 GH¢200 Number of shares 2,000,000 1,000,000 Market value of firm GH¢ 800,000,000 GH¢ 200,000,000 The proposed merger will create GH¢50,000,000 in synergies. Kunla Ltd intends to pay GH¢ 130,000,000 cash for Cunta Ltd. What is the cost of the merger to Kunla Ltd? Compute the NPV of the merger. The managers of these firms have proposed to merge to diversify their activities and to reduce risk. Should you pay a premium for the merged firm? What convincing reasons can these managers give for the proposed merger? What roles do investment banks play in facilitating M&A deals?Ebony Corporation has negotiated the acquisition of Ivory Company in an exchange of shares. Under the terms of the merger, the exchange ratio will be 2.30. Other important pre-merger information for both companies is given below: Expected sales Shares outstanding Expected EPS without merger P/E ratio Ebony Corporation P65,000,000 2,500,000 Ivory Сompany P10,000,000 250,000 P2.00 P1.56 12 11. Assuming no synergy, the estimated post-merger earnings per share for Ebony Corporation is nearest P1.76. a. b. P1.78. с. PI.56. d. P1.43. 12. Based on the information given above, the percentage acquisition premium is nearest 22.6%. b. a. 19.6%. 79.4%. d. 52.0%. c.