Question
In: Finance
Harrods PLC has a market value of £121 million and 5 million shares outstanding. Selfridge Department...
Harrods PLC has a market value of £121 million and 5 million shares outstanding. Selfridge Department Store has a market value of £31 million and 2 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods' CFO concludes that the combined firm with synergy will be worth £167 million, and Selfridge can be acquired at a premium of £10 million. a. If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge,
a. what will the stock price of Harrods be after the acquisition? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b, What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer £41 million? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Harrods PLC has a market value of $310 million and 11 million shares. Selefridge Department Store...
Harrods PLC has a market value of $310 million and 11 million
shares. Selefridge Department Store has a market value $121 million
and 6 million shares. Harrods is considering acquiring Selfridge.
Post-acquisition, the combined value of Harrods is expected to be
$475 million including the synergy. Harrods is considering both a
cash offer and an exchange of share approach. Selfridge can be
acquired at a premium of $13 million over its market value.
Alternatively, Harrods is also considering making an...
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a market...
YQR has a market value of $125 million and 5 million shares
outstanding. HKG has a market value of $40 million and 2
million shares outstanding. YQR thinks of taking over
HKG with a premium of $10 million. The combined firm will be worth
$185 million. If YQR offers 2 million shares of its
stock in exchange for the 2 million shares of HKG, what will the
stock price of YQR be after the acquisition? What
exchange ratio between the two stocks would make...
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a...
YQR has a market value of $125 million and 5 million shares
outstanding. HKG has a market value of $40 million and 2 million
shares outstanding. YQR thinks of taking over HKG with a premium of
$10 million. The combined firm will be worth $185 million. If YQR
offers 1.2 million shares of its stock in exchange for the 2
million shares of HKG, what will the stock price of YQR be after
the acquisition? What exchange ratio between the...
4. YQR has a market value of $125 million and 5 million shares outstanding. HKG has...
4. YQR has a market value of $125 million and 5 million shares
outstanding. HKG has a market value of $40 million and 2 million
shares outstanding. YQR thinks of taking over HKG with a premium of
$10 million. The combined firm will be worth $185 million. If YQR
offers 1.2 million shares of its stock in exchange for the 2
million shares of HKG, what will the stock price of YQR be after
the acquisition? What exchange ratio between...
Sora Industries has 60 million outstanding shares, $121 million in debt, $51 million in cash, and...
Sora Industries has 60 million outstanding shares, $121 million
in debt, $51 million in cash, and the following projected free
cash flow for the next four years:
Year
0
1
2
3
4
Earnings and FCF Forecast ($ million)
1
Sales
433.0
468.0
516.0
547.0
574.3
2
Growth vs. Prior Year
8.1%
10.3%
6.0%
5.0%
3
Cost of Goods Sold
(313.6)
(345.7)
(366.5)
(384.8)
4
Gross Profit
154.4
170.3
180.5
189.5
5
Selling, General, & Admin.
(93.6)
(103.2)
(109.4)
(114.9)...
Sora Industries has 60 million outstanding shares, $121 million in debt, $56 million in cash, and...
Sora Industries has 60 million outstanding shares, $121 million
in debt, $56
million in cash, and the following projected free cash flow for
the next four years:
Year
0
1
2
3
4
Earnings and FCF Forecast ($ million)
1
Sales
433.0
468.0
516.0
547.0
574.3
2
Growth vs. Prior Year
8.1%
10.3%
6.0%
5.0%
3
Cost of Goods Sold
(313.6)
(345.7)
(366.5)
(384.8)
4
Gross Profit
154.4
170.3
180.5
189.5
5
Selling, General, & Admin.
(93.6)
(103.2)
(109.4)
(114.9)...
Sora Industries has 66 million outstanding shares, $121 million in debt, $59 million in cash, and...
Sora Industries has 66 million outstanding shares, $121 million
in debt, $59 million in cash, and the following projected free cash
flow for the next four years:
Earnings Forecast & FCF Forecast
($millions)
Year
0
1
2
3
4
Sales
433.0
468.0
516.0
547.0
574.3
Growth V. Prior Yr
8.08%
10.26%
6.01%
4.99%
COGS
(313.6)
(345.7)
(366.5)
(384.8)
Gross Profit
154.4
170.3
180.5
189.5
Selling, General & Admin.
(93.6)
(103.2)
(109.4)
(114.9)
Depreciation
(7.0)
(7.5)
(9.0)
(9.5)
EBIT
53.8
59.6...
Company A has a market value of equity of $2,000 million and 80 million shares outstanding....
Company A has a market value of equity of $2,000 million and 80
million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
Company A has a market value of equity of $2,000 million and 80 million shares outstanding....
Company A has a market value of equity of $2,000 million and 80
million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
Company A has a market value of equity of $2,000 million and 80 million shares outstanding....
Company A has a market value of equity of $2,000 million and 80
million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- There are a large number of tasks involved in information technology and programming, and many of...
- Using one quantitative and one qualitative health policy research method described in this chapter, design a...
- What is the Rawls' solution to the age-old question of social (economic / distributive) justice?...
- St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has no salvage...
- The following information is available for Robstown Corporation for 20Y8: Inventories January 1 December 31 Materials...
- /* Complete the TO DO comments below */ window.onload = function() { /* TODO add a...
- Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $4,532.35. The bonds...
ADVERTISEMENT