a) Calculate the maximum exchange ratios Maxi ltd should agree if it expects no dilution in the Earnings Per Share. b) How much premium would the shareholders of Mini Ltd
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Maxi ltd is considering acquiring mini ltd. Selected financial data for the two companies are as follows: Max ltd Mini Ltd Annual sales sh. Million 750 90 Net income sh. Millions 60 7.5 Ordinary shares outstanding (millions) 15 3 Earnings per share (EPS) sh 4 2.5 Market price per share (sh) 44 20 Required: a) Calculate the maximum exchange ratios Maxi ltd should agree if it expects no dilution in the Earnings Per Share. b) How much premium would the shareholders of Mini Ltd
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- Nelson Company's current liabilities are P50,000, its long-term liabilities are P150,000, and its working capital is P80,000. If Nelson Company's debt-to-equity ratio is 0.32, its total long-term assets must equal O P625,000 O P825,000 O P745,000 O P695.000 Hydro Cable wishes to calculate their return on assets (ROA). You know that the return on equity (ROE) is 12% and that the debt ratio is 40%. What is the ROA? 0 4.8% O 20% 0 7.2% O 12% Tech Manufacturing Company realized P15,000,000 in sales, with a cost of goods sold of P6,000,000, gross profit margin of 45% of net sales, operating expenses of P4,500,000, tax rate of 35%, and average total assets of P6,500,000. What is Tech's Return on Assets (ROA)? O 42.5% O 50% O 45% O 47.75%Using the following information for Walnut Ltd , Calculate the value per share using the Asset based method . £m £m Non Current Assets 180 Current Assets 75 Current Liabilities (25) 50 230 Financed by: Ordinary Shares (25p) 138 Reserves 32 8% Loan notes 60 230 The disposal value of the fixed assets is estimated at £130m and the realisable value of current assets is estimated at £35m. Recent profit after tax is £27m and a sector P/E ratio is 12 Group of answer choices 31p per share 64p per share 14.5p per share 25p per shareAssume the following information: Bid price of Singapore dollar Ask price of Singapore dollar Marcus Bank $0.748 $0.750 $4,000.00. $5,347.59. $2,000.00. $2,666.67. Truist Bank $0.752 $0.753 Given this information, is locational arbitrage possible? If so,compute the profit from this arbitrage if you had $1,000,000 to use.
- . GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY0.0059-0.0063a. Are these quotes identical? b. If not, is there an opportunity for arbitrage? c. If there is an opportunity for arbitrage, how would one profit from it? 3. Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:(a) Mr. Agbo purchase gbp? (b) Mr. Agbo sell gbp? (c) Mr. Debrah purchase jpy?(d) Mr. Kwaku sell jpy?Choose the correct letter of answer and provide solution The following data applies to a firm: Interest charges=P50,000.00; Sales = P300,000.00; Tax Rate=P25%; Net Profit Margin=3%. What is the firm's time interest covered ratio? a. 0.24b. 0.54c. 1.04d. 1.24e. 1.44Q1. A company is contemplating acquisition of Target firm ABC ltd with following Financials. WACC Inputs Weight of Debt Weight of Equity Cost of Debt Risk-Free Rate Beta Market Risk Premium Tax Rate Free Cash Flow data (In inr millions) EBIT 31% 69% 3.50% 5.00% 1.15 7% 30% 7,000 750 450 750 8% Steady State Growth rate 2% Determine the value of target firm as per DCF-Discounted cash flow analysis? (10) Depreciation & Amortization Capital Expenditure Change in Working Capital Growth rate 8% in forecasted five year period
- 4. Merger analysis - Adjusted present value (APV) approach Wizard Inc., which is considering the acquisition of Global Satellite Corp. (GSC), estimates that acquiring GSC will result in an incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company: Data Collected (in millions of dollars) Year 1 Year 2 Year 3 EBIT $14.0 $16.8 $21.0 Interest expense 3.0 3.3 3.6 Debt 33.0 39.0 42.0 Total net operating capital 113.3 115.5 117.7 Global Satellite Corp. (GSC) is a publicly traded company, and its market-determined pre-merger beta is 1.00. You also have the following information about the company and the projected statements: • GSC currently has a $28.00 million market value of equity and $18.20 million in debt. • The risk-free rate is 5%, there is a 7.10% market risk premium, and the Capital Asset Pricing Model produces a pre-merger required rate of return on equity SL of 12.10%. •…What are the gains from trade of entering into a swap for these two firms? Company A Company B [A] 3% O [B] 6% [C] LIBOR+3% [D] 0% Fixed Rate Floating Rate 13.0% 16.0% LIBOR+3% LIBOR+6%Alpha Ltd and Beta Ltd are both wholesalers serving broadly the same market, but they seem totake a different approach to it according to the following information. Ratio Alpha Ltd Beta Ltd Return on capital employed (ROCE) 20% 9% Return on ordinary shareholders’ funds (ROSF) 30% 28% The average settlement period for trade receivables 63 days 21 days The average settlement period for trade payables 50 days 45 days Gross profit margin 40% 15% Operating profit margin 10% 10% The average inventory turnover period 52 days 25 days Required:Describe what this information indicates about the differences in approach between the twobusinesses. If…
- The firm's current ratio is 2.1. the firm plans to acquire additional inventory to meet a surge in the demand for its products and will pay for the inventory with short-term debt. How much inventory can the firm purchase without violating its debt agreement, to maintain the current ratio of 1.75 if their total current assets equal $3.5 million? a. 777,777 b. 437,500 c. 1 million d. 0TNS Ltd is currently trading at a forward P/D ratio of 25, a forward P/E ratio of 20, a P/B ratio of 4 and P/S ratio of 5. a. What is its PEG ratio ( PE divided by g expressed in %) b. What is its net profit margin equal to c. What is its required rate of return equal to (re)6. Merger analysis - Free cash flow to equity (FCFE) approach Consider the following acquisition data regarding Washington Company and Purple Turtle Corp.: Washington Company is considering an acquisition of Purple Turtle Corp. Washington Company estimates that acquiring Purple Turtle will result in incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company. Data Collected (in millions of dollars) Year 1 Year 2 Year 3 EBIT $11.0 $13.2 $16.5 Interest expense 3.0 3.3 3.6 Debt 34.1 40.3 43.4 Total net operating capital 105.1 107.1 109.1 Purple Turtle is a publicly traded company, and its market-determined pre-merger beta is 1.60. You also have the following information about the company and the projected statements. • Purple Turtle currently has a $12.00 million market value of equity and $7.80 million in debt. •The risk-free rate is 5% with a 7.10% market risk premium, and the…