Bayside Fishing Supply Co.is acquiring Fishing Lure Specialists for $25,250 in cash. Bayside Fishing Supply Co. has 2,350 shares outstanding at a market price per share of $39. Fishing Lure Specialists has 1,500 shares outstanding at $16 per share. Neither firm has outstanding debt. The incremental value (synergy) of the acquisition is $2,300. What is the value of Bayside Fishing Supply Co. after the acquisition? A $89,150 B $56,650 C $88,950 D $92,700 E $73,750
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- Veghie Co is acquiring Fruit Inc for $25,250 in cash. Veggie Co has 2350 shares outstanding at a market price per share of $39. Fruits Inc 1500 shares outstanding at $16 per share. Neither firm has outstanding debt. The incremental value (synergy) of the acquisition is $2300. What is the value of Veggie Co after acquisition? A) 92,700 B) 88,950 C) 56,650 D) 89,150 E) 73,750Principal, Inc. is acquiring Secondary Companies for $29 million in cash. Principal has 2.5 million shares of stock outstanding at a market price of $30 a share. Secondary has 1.6 million shares of stock outstanding at a market price of $15 a share. Neither firm has any debt. The synergy gains of the acquisition is $4.5 million. What is the NPV of the acquisition?Northwest supply co. has 1209 shares outstanding at a market price of $20.65 per share. Radio Supply has 5,000 shares outstanding at a market price of $36.75 per share. Neither firm has any debt. Radio Supply is acquiring Northwest Supply. The incremental value of the acquisition is $1800. What is the value of Noethqest Supply to Radio Supply? A) 26,580 B) 30,900 C) 24,780 D) 32,700 E) 25,780
- Firm A is being acquired by Firm B for $62,000 worth of Firm B stock. The incremental value of the acquisition is $4,300. Firm A has 2,700 shares of stock outstanding at a price of $22 a share. Firm B has 10,400 shares of stock outstanding at a price of $31 a share. What is the actual cost of the acquisition using company stock?a) The market values of Alpha Corporation and Gamma Corporation are $2,500 and $900, respectively. Assume Alpha acquires Gamma at a cost of $1,000 and the transaction creates $100 in synergy. What would be the NPV of this acquisition to Alpha? b) Principal is acquiring Secondary Companies for $38,000 in cash. Principal has 4,500 shares of stock outstanding at a market price of $31 per share. Secondary has 1,600 shares of stock outstanding at a market price of $22 per share. Neither firm has any debt. The net present value of the acquisition is $2,400. What is the price per share of Principal after the acquisition?Required: i)Determine the gain for World Cruise Bhd. when it acquires Sunrise Cruise Bhd. (ii) World Cruise Bhd. is proposing to finance by cash the deal to purchase all of Sunrise Cruise Bhd.’s issued shares and is offering a premium of 25% over the market price of Sunrise Cruise Bhd.’s shares.Calculate the cost of acquisition of Sunrise Cruise Bhd. (iii) Suggest what should be recommended by Jack Pang to the Board of Directors on the proposed acquisition of Sunrise Cruise Bhd. and why Sunrise’s shareholders should accept the offer.
- 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 millionFrom the data given, compute the goodwill or gain from bargain purchase for the different items. If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par value shares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash and paying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. What is the amount of GOODWILL?Thermo Fisher (“Fisher”) is considering an acquisition of Life Technologies (“Life Tech”). Life Tech shares currently trade at $60.75 per share with 179.3 million shares outstanding. Fisher shares currently trade at $40.50 per share with 200 million shares 2 | P a g e outstanding. The current net earnings of Fisher and Life Tech are $440.00 and $322.74 million, respectively. The current net earnings are expected to remain unchanged following the acquisition. It is also estimated that the synergy from acquisition will yield an additional $50 million of annual net earnings to the new company. Marginal tax rate remains unchanged at 35%. Fisher offers $79.80 for each Life Tech share. Assume that Fisher decides to offer 0.8 Fisher share plus remaining in cash for each Life Tech share. The cash will be financed by borrowing from an investment bank at the annual interest rate 5% over 10 years. What is the net earning per shares (EPS) of the combined firm following deal completion? Compared…
- If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: Compute for the total liabilities at the date of acquisitionTransWorld Communications Inc., a large telecommunications company,is evaluating the possible acquisition of Georgia Cable Company (GCC), a regionalcable company. TransWorld’s analysts project the following post-merger data for GCC (inthousands of dollars): If the acquisition is made, it will occur on January 1, 2018. All cash flows shown in the incomestatements are assumed to occur at the end of the year. GCC currently has a capital structureof 40% debt, but Trans World would increase that to 50% if the acquisition were made. GCC,if independent, would pay taxes at 20%, but its income would be taxed at 35% if it wereconsolidated. GCC’s current market-determined beta is 1.40, and its investment bankersthink that its beta would rise to 1.50 if the debt ratio were increased to 50%. The cost of goodssold is expected to be 65% of sales, but it could vary somewhat. Depreciation-generatedfunds would be used to replace worn-out equipment, so they would not be available toTransWorld’s…Bartlies Co is considering whether to acquire Indigo Inc. The values of the two companies as separate entities are $28 million and $14 million, respectively, Bartlies Co estimates that by combining the two companies, it will reduce costs by $540.000 per year in perpetuity. Bartlies considers offering Indigo Inc's shareholders a 50% holding in Bartlies Co. The opportunity cost of capital is 10%. a. What is the value of the stock in the merged company held by the original Indigo Inc's shareholders? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Value of the stock million 00-42:24 b. What is the cost of the stock alternative? (Do not round intermediate calculations).