Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 39% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $42 and Loki's was $51, what exchange ratio will Loki need to offer? a. 1.42 shares of Loki for each share of Thor b. 0.72 shares of Loki for each share of Thor c. 0.86 shares of Loki for each share of Thor d. 1.14 shares of Loki for each share of Thor
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Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 39% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $42 and Loki's was $51, what exchange ratio will Loki need to offer?
a. 1.42 shares of Loki for each share of Thor
b. 0.72 shares of Loki for each share of Thor
c. 0.86 shares of Loki for each share of Thor
d. 1.14 shares of Loki for each share of Thor
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- Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 39% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $42 and Loki's was $51, what exchange ratio will Loki need to offer? 1.14 shares of Loki for each share of Thor 0.72 shares of Loki for each share of Thor 1.42 shares of Loki for each share of Thor 0.86 shares of Loki for each share of ThorFinance Loki Inc. and Thor Inc. have entered into a stock swap merger agreement whereby Loki will pay a 35% premium over Thor’s pre-merger price. A. If Thor’s pre-merger price per share was $37 and Loki’s was $52, what exchange ratio will Loki need to offer? B. On the day of the merger announcement, the increase in Thor (the target firm’s) stock price will be ______(higher/lower) than 35% (the takeover premium). C. Based on your answer in part B of this question, explain why you think Thor’s stock price increase will be higher or lower than the takeover premium at the time of the merger announcement.Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 38% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $40 and Loki's was $52, what exchange ratio will Loki need to offer? The ratio should be shares of Loki for every share of Thor. (Round to two decimal places.) C
- Firm E is going to acquire Firm F. The acquisition will be done via a share exchange, whereby Firm E will exchange 2.65 of its shares for every one of Firm F's shares. Synergy is $1,250,000 in total. Firm E has 350,000 shares outstanding trading at $35 each. Firm F has 45,000 shares outstanding trading at $84 each. What would the exchange ratio have to be for the NPV of the deal to be zero? Question 1 options: A) 3.13 shares of E for every 1 of F B) 0.41 shares of E for every 1 of F C) 3.15 shares of E for every 1 of F D) 2.40 shares of E for every 1 of F E) 3.19 shares of E for every 1 of FA 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 $1.Firm A is planning on merging with the Firm B. Firm A will pay Firm B’s stockholders the current value the of their stock plus one-half on the synergy, which is $120, in shares of firm A. Firm A currently has 4000 shares of stock outstanding at a market price of $21 a share. Firm B has shares outstanding at a price of $10 a share. What is the value of the merged firms? A.$96240 B.$88120 C.$96000 D.$84120 E.$92360 2.Which of the following not true regarding financial statement A.Group financial statement be produced by each subsidiary as well as the parent entity B.Profit must be separated between members of the parent company and that of minority interest C.Minority interest share of equity represents that ‘part of a subsidiary’s equity not allocated to members of the parent company. D.Group financial statements must be produced by the parent entity only. E.None of the options provided.
- 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) 0Croatia 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) 0.4221Prior 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
- Taggart Transcontinental and Phoenix-Durango have entered into a stock swap merger agreement whereby Taggart will pay a 30% premium over Phoenix-Durango's premerger price. If Taggart's premerger price per share was $15 and Phoenix-Durango's was $30, then the exchange ratio that Taggart will offer is closest to: Answer choices: A) 2.6:1 B) 1.8:1 C) 2.0:1 D) 0.4:1Ebony 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.World Enterprises is determined to acquire Intous Ltd through exchanging stocks. World Enterprises is offering R65 per share for Intous ltd. You are given the following information World Enterprises Intous Ltd Net Income R50 R10 Shares outstanding 5000 2000 Earnings per share R10 R5 Market price per share R150 Price earnings ratio R15 a. Calculate the number of shares to be issued by Intous Ltd: b. Calculate combined earnings per share of both World Enterprise and Intous Ltd c. Calculate price earnings ratio (P/E ratio) paid (Hint: use the R65 to calculate the P/E ratio) d. Compare the current and paid P / E ratios