Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Shares outstanding Price per share Firm B 5,400 $53 Firm T 1,300 $23 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $7,900. a. If Firm T is willing to be acquired for $25 per share in cash, what is the NPV of the merger? (Do not round intermediate calculations and round your answer to the รา AL
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- You have been asked to assess the impact of a proposed acquisition on the beta of a firm and have been provided the following information on the two firms involved in the deal: The risk-free rate is 4% and the equity risk premium is 6%. Now assume that Acquirer plans to retire all of Target’s debt and that it will be able to buy Target’s equity at the current market price. If Acquirer would like to have a levered beta of 1.35 for the combined firm after the transaction, estimate how much new debt it will need to raise to finish this acquisition.If bank X is quoting “A $1.5838/ bid and A $1.1682/€ ask” and bank Y is quoting “A $1.1684/€ bid and A $1.1690/€ ask”. If you buy € 2million from X at it’s A $1.1682/€ ask price and simultaneously sell € 2million to Y at it’s A $ 1.1684/€ bid price. Calculate arbitrage profit.he NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $ 64 per share, and LE is trading for $ 13 per share, implying a pre-merger value of LE of approximately $ 6.7 billion. If the projected synergies are $ 2.07 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV? Question content area bottom Part 1 The maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV is enter your response here. (Round to three decimal places.)
- Nizwa investment company is willing to buy the equity shares directly from various companies as they think that buying the shares at the first moment will always give benefits for long timeThe market from where this transaction will be carried out is termed as a.Primary Market b.Regular Market c.Secondary Market d.None of the options A financial statement which shows the status of the worth of a company on a certain date is known as a.Cash flow statement b.Balance Sheet c.All of the optionsThe NFF Corp. has announced plans to acquirer LE Corp. NFF is trading for $35 per share and LE is trading for $25 per share, implying a pre-merger value of LE of approximately $4 billion. If the projected synergies are $1 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?KT corporation has announced plans to acquire MJ corporation. KT is trading for $45 per share and MJ is trading for $25 per share, with a premerger value for MJ of $3 billion dollars. If the projected synergies from the merger are $750 million, what is the maximum exchange ratio that KT could offer in a stock swap and still generate a positive NPV? It is closest to: Answer choices: A) 0.75 B) 3.30 C) 2.25 D) 1.30
- The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $ 25 per share, and LE is trading for $ 29 per share, implying a pre-merger value of LE of approximately $ 7.3 billion. If the projected synergies are $ 1.27 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?As a merger arbitrageur you are considering an investment in two target companies of a merger, A and B. The deal spread for A is 16 % and for B the deal spread is 8 %. Which of the following statements is correct? O A. The probability of deal failure is higher for A than for B. O B. The probability of deal failure is higher for B than for A.The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share, and LE is trading for $57 per share, implying a pre-merger value of LE of approximately $8.4 billion. If the projected synergies are $2.89 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?
- As a merger arbitrageur you are considering an investment in two target companies of a merger, A and B. The deal spread for A is 16 % and for B the deal spread is 8 %. Which of the following statements is correct? O A. If both deals fail, then A will have a more negative return than B. O B. If both deals fail, then B will have more negative return than A.After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios EJH Enterprises has EPS of $1.80, EBITDA of $290 million, $30 million in cash, $40 million in debt, and 102 million shares outstanding. What range of prices is consistent with both sets of multiples? The lowest price within both ranges, the P/E and the EV/EBITDA ranges, is S (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Comp 2 Comp 31 11 12.5 18 20 EV/EBITDA P/E Comp 1 12 19 Print Done Comp 4 10 17 - XEaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity (also referred to as the required rate of return for common equity). Assume: Rf Km = 8% = 6% = В D₁ = $0.60 Po = $20 8 = 5% = 1.8 a. Compute K; (required rate of return on common equity based on the capital asset pricing model). Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Ki 0.10% b. Compute Ke (required rate of return on common equity based on the dividend valuation model). Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Ke %