The Justice Department has been asked to review a merger request for a market with the following four firms. Firm Assets A $10 Million B 20 Million C 100 Million D 30 Million If Firm A acquires Firm D, what is the HHI for the new market? 4,687.50 3,906.25 625 100

The Justice Department has been asked to review a merger request for a market with the following four firms. Firm Assets A $10 Million B 20 Million C 100 Million D 30 Million If Firm A acquires Firm D, what is the HHI for the new market? 4,687.50 3,906.25 625 100

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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30. An investment in equity securities with a carrying amount of P600,000 was exchanged to an equipment with a fair market value of P400,000. The fair market value of the investment in equity securities at the time of exchange was P800,000. How much is the cost of the new equipment?Group of answer choices200,000400,000800,000600,000
QUESTION 4 The directors of Pep Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Guardiola Limited. You are to advise them whether or not to proceed with the project. The following information is available: - Pep Limited Guardiola Limited Market price per share R5.00 R4.00 Earnings per share R2.2 R1.8 No. of shares issued 3 000 000 2 000 000 - Cash payment of R7 million to Guardiola Limited - Synergy benefits of R3 million will accrue to the acquisition Required: Assume the acquisition is based on market values with a cash payment. 4.1 Calculate the combined value of the proposed acquisition. 4.2 Calculate the net present value of the proposal. 4.3 Calculate the acquisition premium. 4.4 Calculate the post-acquisition market price of the share. 4.5 Calculate the post-acquisition increase/decrease price of the share. 4.6 Identify and explain SIX (6) advantages associated with a Merger and Acquisition.
Hi. I need help with the following question please. One company that the analysis indicated as potentially suitable for acquisition by Admiral isFavorite Food Systems Inc. Favorite Food Systems Inc. which was founded by John Favorite in 1994, is a WestCoast chain with current annual sales of approximately $75 million. In 2003, the company went public.(The Favorite family now controls about 57 percent of the common stock.) 1. The merger will generate $1.0 million in after tax earnings each year from synergies. Calculate the free cash flow from the synergies for 5 years, assuming $100,000 of depreciation for each year. 2. Develop the terminal year value of the synergies based on the fifth year of the cash flows. Assume the growth rate of the synergistic cash flows after the terminal year is 1.0% 3. Calculate the Admiral Foods post-merger income statement and earnings per share, assuming an exchange ratio of 0.45.
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
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
Ee 111.
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
3.
Question : Please examine, analyze, present (incl. in tables and charts) and explain your answers on the following:1. What is the strategic rationale/logic of Covestroís management to engage in this acquisition? (Summarize in a few short bullet points.)2. Examine Covestroís share price graph from Jan 2017 until today i.e. Nov 2021.(a) Describe and explain your observations and speculate/try to rationalize the share price movements, dividing them into four periods: early 2017 until peak in early 2018; 2018 until March2020; between March and Sep 2020; and from Oct 2020 until Oct 2021. Make use of newscommentaries and Covestroís annual and quarterly Önancial reports.1(b) Do the equity markets view the DSM RFM acquisition positively?
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4. Merger analysis - Adjusted present value (APV) approach Wizard Inc., which is considering the acquisition of Global Satellite Corp. (GSC), estimates that acquiring GSC will result in an incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company: Data Collected (in millions of dollars) Year 1 Year 2 Year 3 EBIT $14.0 $16.8 $21.0 Interest expense 3.0 3.3 3.6 Debt 33.0 39.0 42.0 Total net operating capital 113.3 115.5 117.7 Global Satellite Corp. (GSC) is a publicly traded company, and its market-determined pre-merger beta is 1.00. You also have the following information about the company and the projected statements: • GSC currently has a $28.00 million market value of equity and $18.20 million in debt. • The risk-free rate is 5%, there is a 7.10% market risk premium, and the Capital Asset Pricing Model produces a pre-merger required rate of return on equity SL of 12.10%. •…

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