Assuming a 100% stock transaction with a 20% offer premium andthe following facts:Acquirer$40.00$2,000 million1,000.0 million$0 millionTarget$15.00$400 million400.0 millionCurrent Stock PriceNet IncomeDiluted Shares Outstanding (no options outstanding)Transaction ExpensesCalculate accretion/(dilution) % assuming $100 million of pre-taxsynergies and a 40% tax rate.

We have a possible acquisition through a pure share swap. We have to find the EPS accretion /…

Assuming a 100% stock transaction with a 20% offer premium and the following facts: Current Stock Price Net Income Diluted Shares Outstanding (no options outstanding) Acquirer $40.00 $2,000 million 1,000.0 million $0 million Target $15.00 $400 million 400.0 million Transaction Expenses Calculate accretion/(dilution) % assuming $100 million of pre-tax synergies and a 40% tax rate.

Assuming a 100% stock transaction with a 20% offer premium and the following facts: Current Stock Price Net Income Diluted Shares Outstanding (no options outstanding) Acquirer $40.00 $2,000 million 1,000.0 million $0 million Target $15.00 $400 million 400.0 million Transaction Expenses Calculate accretion/(dilution) % assuming $100 million of pre-tax synergies and a 40% tax rate.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter14: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2STP

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Assuming the following: 1. 4mm outstanding shares 2. $40mm of pre-tax Net Income 3. $9mm of Depreciation 4. PE multiple of 16x 5. $1.75 quarterly dividend which is expected to grow by 4.23% 6. Book value of $115mm 7. Current share price of $125 8. Tax rate of 25% 9. EBITDA Multiple of 7x. What is the market value of equity? A form of the correct answer would be $53mm.
Why do you deduct or subtract 1 to flotation cost? Example: Given; Annual dividend (D) = $4.75 Flotation cost (F) = 0.05 or 5% Number of shares issued (N) = 10,000 Stock price (P0) = $50 Formula; Total value able to receive = N * P0 * (1 - F) Total value able to receive = 10,000 * $50 * (1 - 0.05) Total value able to receive = $500,000 * 0.95 Total value able to receive = $475,000
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Problem: Happy realized income of P97.000 before interest and income taxes, with Assets of ..P517.000 Liabilities 220,000 SE 297,000 os Income Tax Rate 32% he corporation want to have additional capital of P300.000 in order to add its operating incom y P150.000. Two options are presented: 1) Obtain P300.000 loan having interest of 30%. 2) Additional of 1270 shares of capital stocks with market price of P 1200 10,000 (Par value P100) Compute: both options 1) Net Income 2) Earnings per share 3) Rate of return on Owner's Equity 4) Which option is advantageous to Happy Corporation?
The marginal cost of new common share is?
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