live the answer in two decimal place Tigo Ltd is contemplating the acquisition of Airtel Ltd....

live the answer in two decimal place

Tigo Ltd is contemplating the acquisition of Airtel Ltd. The present values of the two companies as separate entities are GH¢30million and GH¢10million respectively. Tigo estimates that by combining the two companies, it will reduce marketing and administration costs by ¢700,000 per year in perpetuity. Tigo can either pay ¢15million cash for AIrtel or offer Airtel shareholders a 50% holding in Tigo. The opportunity cost of capital is 10%.

Use this question to answer Question a to Question e

a. What is the gain from the merger *

b. What is the cost of the cash offer? *

c. What is the cost of the stock alternative? *

d. What is the NPV of the acquisition under the cash offer? *

e.What is its NPV under the stock offer? *

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Velcro Saddles is contemplating the acquisition of Skiers’ Airbags Inc. The values of the two companies...

Velcro Saddles is contemplating the acquisition of Skiers’ Airbags Inc. The values of the two companies as separate entities are $24 million and $12 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $520,000 per year in perpetuity. Velcro Saddles can either pay $16 million cash for Skiers’ or offer Skiers’ a 48% holding in Velcro Saddles. The opportunity cost of capital is 10%. Required: What is the gain from...

Velcro Saddles is contemplating the acquisition of Skiers’ Airbags Inc. The values of the two companies...

Velcro Saddles is contemplating the acquisition of Skiers’ Airbags Inc. The values of the two companies as separate entities are $52 million and $26 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $660,000 per year in perpetuity. Velcro Saddles is willing to pay $30 million cash for Skiers’. The opportunity cost of capital is 10%. a. What is the gain from the merger? (Enter your answer in millions rounded...

PLEASE ANSWER ALL QUESTIONS. Round to the fourth decimal place. 1). Two point charges, q₁= +10...

PLEASE ANSWER ALL QUESTIONS. Round to the fourth decimal place. 1). Two point charges, q₁= +10 nC and q₂= +1 nC, are located on the x-axis at x= 0 and x=5.00 m. What is the electric field at point x=1.80 m? 2). Two point charges, q₁= +7 nC and q₂= -5 nC, are located on the x-axis at x= 0 and x=5.00 m. What is the electric field at point x=3 m? 3).Two charges, one is + 30 nC and...

Tax effects of acquisition Connors Shoe Company is contemplating the acquisition of Salinas Boots, a firm...

Tax effects of acquisition Connors Shoe Company is contemplating the acquisition of Salinas Boots, a firm that has shown large operating tax losses over the past few years. As a result of the acquisition, Connors believes that the total pretax profits of the merger will not change from their present level for 15 years. The tax loss carryforward of Salinas is $800,000, and Connors projects that its annual earnings before taxes will be $280,000 per year for each of the...

Find the standard deviation of the following data. Round your answer to one decimal place. x...

Find the standard deviation of the following data. Round your answer to one decimal place. x −6 −5 −4 −3 −2 −1 P(X=x) 0.1 0.1 0.3 0.1 0.1 0.3

Find the standard deviation of the following data. Round your answer to one decimal place. x...

Find the standard deviation of the following data. Round your answer to one decimal place. x −5 −4 −3 −2 −1 0 P(X=x) 0.1 0.1 0.2 0.1 0.2 0.3

1. Find the standard variation of the following data. Round your answer to one decimal place....

1. Find the standard variation of the following data. Round your answer to one decimal place. 2. find the value of P( X > 3) 3. find the value of P (X [less than or equal to] 7) x 3 4 5 6 7 P(X=x)P(X=x) 0.2 0.2 0.1 0.2 0.3

Find the variance of the following data. Round your answer to one decimal place. x 3...

Find the variance of the following data. Round your answer to one decimal place. x 3 4 5 6 7 8 P(X=x) 0.1 0.1 0.1 0.2 0.2 0.3

Find the variance for the given sample data. Round your answer to one more decimal place...

Find the variance for the given sample data. Round your answer to one more decimal place than the original data. 3) The weights (in ounces) of 10 cookies are shown. 1.4 0.99 1.37 0.58 0.68 0.57 1.1 0.96 1.2 1.27

Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component insertion systems for...

Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model A: Variable costs, $20.00 per unit Annual fixed costs, $985,700 Model B: Variable costs, $12.80 per unit Annual fixed costs, $1,114,100 The selling price is $67 per unit for the universal gismo, which is subject to a 15 percent sales commission. (In the following requirements, ignore income taxes.) 1. How...

Subjects