If the transaction is using 100% of Acquiring Co.'s stock, the exchange ratio is The number of new shares issued by Acquiring Company is The post-merger EPS of the combined company is If the transaction is using 100% cash, all the cash is borrowed at an annual rate of 75%, and the tax rate is 40%, the post-merger earnings of the combined company are And the post-merger EPS of the combined company is
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- You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt $3,562 Target Cash and Cash Equivalents $5,147 % Debt Financing 40% % Equity Financing 60% Equity Financing Fees 4.0% Debt Financing Fees 1.5% Other Transaction Costs $8004. An entity showed the following data:Share capital, par value P50 5,000,000Share premium 200,000Retained Earnings 2,000,000Market value of share on declaration date 75Market value of share on distribution date 85Treat each item independently: a. If the entity would declare a 1 for 5 share dividend, what amount would be charged to retained earnings? b. What amount will be credited to share premium if the entity would declare 15% share dividend?A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: Minnie Corporation Mickey Corporation Total earnings $1,682,000 $2,581,000 Number of shares of stock outstanding 290,000 890,000 EPS $5.80 $2.90 P/E ratio 10X 20X Market price per share $58 $58 a. On a share-for-share exchange basis, what will the postmerger EPS be? (Round the final answer to 2 decimal places.) Postmerger earnings per share $ b. If Mickey Corporation pays a 25 percent premium over the market value of Minnie Corporation, how many shares will be issued? (Do not round intermediate calculations.) Shares issued shares c. With the 25 percent premium, what will the postmerger EPS be? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Postmerger earnings per share $
- 4. An entity showed the following data:Share capital, par value P50 5,000,000Share premium 200,000Retained Earnings 2,000,000Market value of share on declaration date 75Market value of share on distribution date 85Treat each item independently: e. If the entity would declare a 2 for 1 share split, How much would be the new par value?4. An entity showed the following data:Share capital, par value P50 5,000,000Share premium 200,000Retained Earnings 2,000,000Market value of share on declaration date 75Market value of share on distribution date 85Treat each item independently: c. How much would be the total shareholders’ equity after a 10% share dividend declaration? d. If the entity would declare a 1 for 5 share split, What would be the balance of retained earnings?Acquirer Shares Outstanding Target Shares Outstanding Acquirer Share Price Target Share Price Cash Consideration in percent Takeover Premium Given the above data, what is the amount of stock consideration involved in the deal? (Rounding to the closest whole number) 22,000 66,000 800,000 5,000 $8.00 $16.00 25% 10% 5,280,000
- Question Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 X $25 $387,500 BVD Company 20,000 x$18 |S360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company IS19 $23 BVD Company $22 $28 REQUIREMENTS: ( Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo…PROBLEM X Red Corporation will issue common shares with a par value of P10 for the net assets of Blue Company. Red's Common stock has a current market value of P40 per share. Blue's statement of financial position on the date of acquisition follow: Current assets P320,000 Common stock, P5 par P80,000 Property and Equipment 880,000 Additional paid in capital 320,000 Liabilities 400,000 Retained Earnings 400,000 Blue's current assets are appraised at P400,000 and the property and equipment was also appraised at P1,600,000. Its liabilities are fairly value. Accordingly, Red Corporation issued shares of its common stock with a total market value equal to that of Blue's net assets including goodwill. 1. To recognize goodwill of P200,000, how many shares were to be issued?Target Share Price Takeover Premium Acquirer Share Price Target Shares Outstanding Acquirer Shares Outstanding Given the data in the above table, calculate the share exchange ratio: 0.46 1.12 2.62 4.19 $15.50 10% $6.50 300 700
- EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table. Henry Company is considering merging with Mayer by swap-ping 1.25 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging. Item Henry company Mayer Services Earnings available for common stock $225,000 $50,000 Number of shares of common stock outstanding $90,000 $15,000 Market price per share $45 $50 d. Calculate the postmerger earnings per share (EPS) for Henry Company?EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table.Henry Company is considering merging with Mayer by swap-ping 1.25 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging. Item Henry company Mayer Services Earnings available for common stock $225,000 $50,000 Number of shares of common stock outstanding $90,000 $15,000 Market price per share $45 $50 C. Calculate the price/earnings (P/E) ratio used to purchase Mayer Services.Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table: Apex $750 Pinnacle $215 $100 $ 30 50 30 32 11 $ 2.00 $0.90 $1.00 $0.40 16 11 45% 40% Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio Assume that there are immediate synergistic benefits of $3 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places): a. 20 percent premium for Pinnacle $ b. 30 percent premium for Pinnacle $ c. 40 percent premium for Pinnacle $