Kclub has market value of 680million and Gclub has marketvalue of 170 million. Mergerresult in cost savings of, 500, 000 a year forever. Costsavings will grow at 5% a year.Kclub proposes to buy Gclub for306 million. Payment will be intwo years. Cost of capital is30%. K has 100million shareaand G has 100million shares.Find: A. Present value of mergerB. Cost to shareholders of Kclubfrom merger C. Npvmergerto Kclub shareholders

Q: You are making a proposal to start a corporation that would require invested capital of P9,000,000…

A: Invested capital = P9,000,000 Annual earnings = P1,500,000 Interest Rate = 8% Required Rate of…

Q: Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares…

A: The question is based on the calculation of value of shares in case of merger with concept of…

Q: The following table provides the annual profits of two startup tech firms along with their present…

A: To determine which firm would be better for acquisition, we should consider the present value (PV)…

Q: QUESTION: WHICH OF THE FOLLOWING TRANSACTIONS WILL INCREASE A CORPORATION'S RETURNS ON ASSETS? wwwww…

A: The transaction that will increase a corporation's operating returns on assets is:C. Negotiate a new…

Q: Graham​ & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of…

A: The question involves evaluating a merger proposal between Graham & Sons and RCN Group. We need…

Q: Brothers Coffee Co is planning on merging with Steve's Tea. Brothers Coffee will pay Steve's Tea…

A: A merger is a kind of commercial transaction in which two separate firms that already exist come…

Q: Assume a company has 12,5 million shares in issue. The current market price per share is R65 per…

A: Option b: This option is correct. Step 1:We have to calculate the share price after accepting the…

Q: Calculation of Net Present Value of Net Cash Benefit from the Sock and Shoe Merger.  The after-tax…

A: After tax cash flow = cf = $250,000 Time = t = 10 years Cost of capital = r = 7% Payment =…

Q: A PE firm has just offered to purchase a Facilties Services firm for $60/share. If the Facilities…

A: The enterprise value of the company is the actual value of the company used to do valuation at the…

Q: Winterbourne is considering a takeover of Monkton Incorporated. Winterbourne has 29 million shares…

A: alculate the Net Worth of Monkton before the Merger: Net Worth before…

Q: EFG Holdings Corporation will be acquiring 100% ownership of HIJ Corporation. The latter currently…

A: To calculate the value of control over HIJ that EFG Holdings Corporation would still avoid if it…

Q: The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation.…

A:

Q: Firm A and Firm B agreed on a swap merger by which Firm A pays 15% premium over Firm B's pre-merger…

A: Following is the answer to the question.

Q: e-2. How much would bondholders gain or lose in the merger? (Do not round intermediate calculations…

A: Bentley Value of Debt = 0.7*145000+0.3*130000 = 101,500+ 39,000 = $140,500Thus, debt of Bentley=…

Q: The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation.…

A: Earnings per share represents the amount of profit made by the firm for each share outstanding.

Q: As a merger arbitrageur you are considering an investment in two target companies of a merger, A and…

A: The deal spread of A is 16% The deal spread of B is 8%

Q: The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share,…

A: Exchange ratio refers to the issue of no. of shares by the acquiring company to the shareholders of…

Q: None

A: To solve this problem, we need to calculate the present value of the perpetual cash flows for Firm…

Q: Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4…

A: The price-earning ratio after merger will be same for both firms because no synergies added and…

Q: ABC and XYZ have total equity values of P5,000,000 and P10,000,000 respectively. If they merged, a…

A: We need to use constant growth model to calculate share price after merger. Stock price(P0) =D1rs -g…

Q: If the change in V (AV) is $20 million, the joint value of the two firms is (VAB) is $95 million and…

A: The value of a firm, often termed its valuation, signifies the monetary estimation of the entire…

Q: Answer

A: ABC Electronics must decide between reducing costs or innovating to stay competitive. Global…

Q: Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at…

A: With the given information, we can determine the price per share of the combined corporation post…

Q: Theta Corporation will be purchasing 20 pieces of P10,000 - par value X Inc. preferences shares.…

A: Present value : The financial concept used to establish the current valuation of future cash flows…

Q: Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock…

A: Due to acquisition there are synergies due to which there is cost savings due to which there is…

Q: Suppose that Flight Centre has made an offer for Webjet that consists of the cash purchase of 1.4…

A: Given, Additional CF = $3.5 million Discount rate = 12% or 0.12 Cash purchase = 1.4 million shares…

Q: he NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $ 64 per​…

A: Step 1:

Q: Consider the following two merger candidates. The merger is for diversification purposes only with…

A: Two companies, A and B, are contemplating a merger primarily for diversification, with identical…

Q: a. If Castles acquires the other firm by exchanging one of its shares for every two of Firm…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Graham​ & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of…

A: Earnings Per Share (EPS) is a crucial financial metric used by businesses and investors alike to…