3. Before the acquisition of AFB, the market value of MBSB and AFB were RM250 million and RM15 million respectively. The offer from MBSB to AFB was at cost of RM17.2 million which above the market value and number of share outstanding for MBSB and AFB were 25 million and 34 million respectively. Based on the information given, calculate: (a) Number of shares to be exchange for the acquisition. (b) Share price of merged firm (c) The synergy value created by this merger.

3. Before the acquisition of AFB, the market value of MBSB and AFB were RM250 million and RM15 million respectively. The offer from MBSB to AFB was at cost of RM17.2 million which above the market value and number of share outstanding for MBSB and AFB were 25 million and 34 million respectively. Based on the information given, calculate: (a) Number of shares to be exchange for the acquisition. (b) Share price of merged firm (c) The synergy value created by this merger.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following information about Firm A and Firm T: Item Firm A (Aquiring Firm Firm T (Target Firm Price/share $20 $15 Outstanidng shares 50 25 Total market value $1,000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the merger premium? Select one: a. $135.00 b. $125.00 c. $175.00 d. $150.00
Consider the following information about Firm A and Firm T: Item Firm A (Acquiring firm) Firm T (Target firm) Price per share $20 $15 Outstanding shares 50 25 Total market value $1000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the merger premium? Select one: a. $150.00 b. $135.00 c. $125.00 d. $175.00
please need help assume as possible
Company A is considering the acquisition of Company B, and intends to finance this potential acquisition using only retained cash. Consider the information in Table 2 about Companies A and B, expected synergies from the acquisition and price asked by Company B's shareholders to sell their company. Table 2 A Current market value (€) 700 420 Number of shares 100 40 Expected synergies from acquisition (€) 80 Value asked by Company B's shareholders (€ ) 560 To answer the following questions make plausible assumptions if necessary. a. What is the expected combined value after acquisition? Explain your answer. b. Should A acquire B by €560? Explain your answer. c. Consider the scenario where Company A decides to finance the acquisition with equity instead of cash. What would be the optimal exchange ratio of Company Av ersus Company B shares? Explain your answer.
Mammoth Inc. is acquiring Snail Ltd. Mammoth's share price is $50 and Snail's share price is $10. Both firms have 1 million shares outstanding. Mammoth expects a discounted synergistic value of $5 million from the merging of operations of the two firms. If Mammoth pays cash of $11.5 million to Snail's shareholders, what is the value of the merged firm? $68.5 million $65.0 million $60.0 million $63.5 million
Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table: Apex Pinnacle $845 $120 40 36 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share. P/E ratio Dividend payout ratio Assume that there are no synergistic benefits as the result of the merger. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places): a. 10 percent premium for Pinnacle $ b. 20 percent premium for Pinnacle $ c. 30 percent premium for Pinnacle $2,190 $ 280 70 72 $ $ $ 4.00 2.00 18 50% $ $ 3.00 1.20 12 40%
Xterm R US has offered $178,500 cash for all of the common stock of Outdoor Co. Based on recent market information Outdoor Co is worth $174,200 as an independent operation. If the merger makes economic sense for Xterm R US, what is the minimum estimated value of the synergistic benefits from the merger? A)4300 B) 4730 C) 5160 D) 4000 E) 4945
ABC will be merging with Target Corporation. Equity values were gathered as follows: ABC, separate equity value = P13,000,000; Target, separate equity value = P2,500,000. The merged entity, ACBT Inc., will have annual net earnings of P3,060,000 and a required return on equity of 18%. *How much is the value of synergy of the merger?
(please correct answer and) Question 26 Firm A and Firm B are both all - equity firms. Firm A has 2,200 shares outstanding at a market price of $16 per share. Firm B has 4,020 shares outstanding at a market price of $18 per share. Firm B is acquiring Firm A for $30,000 in cash. The incremental value of the acquisition is $3,400. What is the net present value of the acquisition? $840-$990-$1,020 $ 8,600 $9,050
Ex. 3 Company A is considering acquiring company B. Calculate the combined PV of Companies A and B, the goodwill and the net gain for the shareholders of company A and shareholders of Company B, considering the following financial information: Present value of Company A Present value of Company B Cost saving from merger of A and B Price A pay for B (EUR) 30 75 22 80 mn mn mn mn The present value of company B increase by EUR 7 mn on the back of rumors about the potential merger. Calculate the adjusted goodwill and adjusted gain for the shareholders of company A and shareholders of Company B after the rumors.
Principal, Inc. is acquiring Secondary Companies for $29 million in cash. Principal has 2.5 million shares of stock outstanding at a market price of $30 a share. Secondary has 1.6 million shares of stock outstanding at a market price of $15 a share. Neither firm has any debt. The synergy gains of the acquisition is $4.5 million. What is the NPV of the acquisition?
Ebony 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.

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