Calculate the exchange ratio (new shares / old shares) for the following transaction. Assume the equity issuance is performed as a share for share exchange. Buyer Target Share price 517.46 52.45 Acquisition premium 20.0% Shares outstanding 1886.0 1014.2 Target net debt to be refinanced 5169.2 % equity financing 64.9% a) 18.3463 b) 9.8658 c) 0.0789 d) 0.0853 *Please provide explanation.
Calculate the exchange ratio (new shares / old shares) for the following transaction. Assume the equity issuance is performed as a share for share exchange. Buyer Target Share price 517.46 52.45 Acquisition premium 20.0% Shares outstanding 1886.0 1014.2 Target net debt to be refinanced 5169.2 % equity financing 64.9% a) 18.3463 b) 9.8658 c) 0.0789 d) 0.0853 *Please provide explanation.
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
Related questions
Question
4
Transcribed Image Text:Calculate the exchange ratio (new shares / old
shares) for the following transaction. Assume
the equity issuance is performed as a share
for share exchange.
Buyer Target
Share price
517.46 52.45
Acquisition premium
20.0%
Shares outstanding
1886.0 1014.2
Target net debt to be refinanced
5169.2
% equity financing
64.9%
a) 18.3463
b) 9.8658
c) 0.0789
d) 0.0853
*Please provide explanation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education