Question
In: Finance
Barrison is investigating the possible acquisition of Soulmaster. The two firms have the following basic data:...
Barrison is investigating the possible acquisition of Soulmaster. The two firms have the following basic data:
Barrison Soulmaster
Number of shares 3,000,000 1,200,000
Current stock price $75.00 $25.00
The combined firm will result in a synergy gains of $15m.
a. What is the value of of the combined firm?
b. What is the NPV of acquisition if Barrison pays $30 in cash for each share of Soulmaster?
c. What is the NPV of the acquisition if Barrison offers one share of Barrison for every two shares of Soulmaster?
Solutions
jeff jeffy answered 5 months agoRelated Solutions
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As financial manager of Corton Inc., you are investigating a
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Corton
Denham
Forecast earnings per share
$
7.80
$
1.30
Forecast dividend per share
$
4.68
$
.69
Number of shares
2,400,000
2,000,000
Stock price
$
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$
20
You estimate that investors expect a steady growth of about 6%
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As financial manager of Corton Inc., you are investigating a possible acquisition of Denham. You have...
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Corton
Denham
Forecast earnings per share
$
6.80
$
1.80
Forecast dividend per share
$
4.08
$
.96
Number of shares
1,900,000
1,500,000
Stock price
$
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$
20
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Assume you are buying an existing apartment complex and have made the following assumptions: Data Acquisition...
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Acquisition Cost
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Project Length
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Year 1 Rental Income
$560,000
Rental Income Annual Growth
3%
Year 1 Expenses
$200,000
Expenses Annual Growth
2%
Ordinary Tax Rate
28%
Capital Gains Tax Rate
15%
Annual Appreciation Rate of Property Market Value
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30-year Fixed Fully Amortizing Loan (monthly
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Term in Years
30
Interest Rate (Annualized)
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LTV
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You are investigating two genes for interaction. You have two lines of the organism that are...
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You have been provided the following data on the securities of three firms and the market:...
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securities of three firms and the market:
Security
E[Rj]
sj
rjM
bj
Firm A
0.13
.12
?
.90
Firm B
0.16
?
0.40
1.10
Firm C
0.25
0.24
0.75
?
Market
0.15
0.10
1
1
Risk-free
0.05
0
0
0
Assume the CAPM holds
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Fill in the missing values in the table.
0.9 =
(rjM)(0.12) /
0.10
ri,m=
.75
bj =
(rjM)(sj)
/ sm
= .4
(sj)
/ .10...
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A company is evaluating the acquisition of a machine. The alternatives you have are two. The...
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Life in years 3
MONOPOLY Firms clearly want to have a monopoly, or as much monopoly power as possible. (By...
MONOPOLY
Firms clearly want to have a monopoly, or as much
monopoly power as possible. (By Monopoly power I'm referring
to the ability to control their price). After all, perfectly
competitive firms can expect zero economic profit in the long
run.
Over the years, various products have been "given away" or
"integrated" into other products as a way of using "predatory
pricing" to keep competitors out of the market.
Be sure to include the source/link.
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