Company A Acquires Company B at $9 per share Company B; Trading at $5, 1,000,000 outstanding shares Company A synergies of $6,000,000 from acquisition FInd Max price Company A should Pay for Company B

Company A Acquires Company B at $9 per share Company B; Trading at $5, 1,000,000 outstanding shares Company A synergies of $6,000,000 from acquisition FInd Max price Company A should Pay for Company B

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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Question

Company A Acquires Company B at $9 per share

Company B; Trading at $5, 1,000,000 outstanding shares

Company A synergies of $6,000,000 from acquisition

FInd Max price Company A should Pay for Company B

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Qw.31.
You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt $3,562 Target Cash and Cash Equivalents $5,147 % Debt Financing 40% % Equity Financing 60% Equity Financing Fees 4.0% Debt Financing Fees 1.5% Other Transaction Costs $800
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