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Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $3 per share. Also assume that neither firm has any debt before or after the merger. What is the value of the total equity of the combined firm, XY, if the purchase method of accounting is used?
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- Current Asset 120 000Cash 20 000Accounts Receivable 45 000Short-term investments 12 000Merchandise Inventory 42 000Current Liabilities 68 000 What is the company's current ratio?What is the company's quick ratio?ABC Analysis Stock Number Annual $ Volume Percent of Annual $ Volume J24 12,500 46.2 R26 9,000 33.3 L02 3,200 11.8 M12 1,550 5.8 P33 620 2.3 T72 65 0.2 S67 53 0.2 Q47 32 0.1 V20 30 0.1 Σ = 100.0Net Income $ 990,000 Earnings per Share 2.675675676 Dividends per Share 1.067567568 Book Value per Share 49.45945946 P/E ratio 17.56565657 Intepretation: Given this data, is this stock a good investment? Why or why not?
- Consider the following table of Earnings Components: Firm A Firm B Firm C Reported EPS $12 $15 $18 Analyst’s EPS composition: Permanent component (βP = 5) 80% 60% 75% Transitory component (βT = 1) 10% 35% 25% Value-irrelevant component (β0 = 0) 10% 5% 0% The implied total earnings multiple of Firm B is: Multiple Choice 1.00. 3.00. 3.35. 12.00Consider the following table of Earnings Components: Firm A Firm B Firm C Reported EPS $ 12 $ 15 $ 18 Analyst’s EPS composition: Permanent component (βP = 5) 80 % 60 % 75 % Transitory component (βT = 1) 10 % 35 % 25 % Value-irrelevant component (β0 = 0) 10 % 5 % 0 % The implied share price of Firm C’s stock is: Multiple Choice $18.00 $63.00 $72.00A company in the same industry as Company XYZ has a price-to-earnings (P/E) ratio of 15. If Company XYZ's earnings per share (EPS) is $3, what is the estimated value of Company XYZ's stock based on the P/E multiple? a b C d $20 $30 $45 $50
- Particulars No. of equity shares Profit after tax Market Price Per Share Compute the following: i) EPS of both the companies ii) Exchange Ratio Infinity Limited 6,00,000 $20,00,000 $20 Global Limited 2,00,000 $10,00,000 $15Consider the following premerger information about Firm A and Firm B: Firm A Firm B $2,700 $900 200 1,000 $ 29 $ 33 Total earnings Shares outstanding Price per share Assume that Firm A acquires Firm B via an exchange of stock at a price of $35 for each share of B's stock. Both A and B have no debt outstanding. a. What will the earnings per share, EPS, of Firm A be after the merger? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What will Firm A's price per share be after the merger if the market incorrectly analyzes this reported earnings growth (that is, the price-earnings ratio does not change)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What will the price-earnings ratio of the postmerger firm be if the market correctly analyzes the transaction? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) If there are no synergy gains, what will…10-3 Given the following share price history, what is the arithmetic average return per share? Year Share price 1 $20 2 $22 3 $24 4 $26 5 $28 Select one: a. 3.24% b. 4.05% c. 5.36% d. 8.78% e. 10.75%
- Please use excel formulas Current dividend Years until dividend ceases Required return (Use cells A6 to B8 from the given information to complete this question.) Output area: Share price $9.45 13 10.70% ?The Dividend income/investment income for 20x1: A. 88,500 B. 65,000 C. 61,600 D. 40,000Financials of X Ltd are as follows. 10% Debt 6500; Current Market Price 80.21; Equity Beta 1.25; Equity Capital (Rs 10) 1900; Market Risk Premium 6; PAT 1235; Retained Earnings 4100; Risk Free Return 7%; Tax 35%. Find market value added. a. Rs 9329.30 b. Rs 9932.90 c. Rs 9239.90 d. Rs 9329.90