Winterbourne is considering a takeover of Monkton Incorporated. Winterbourne has 29 million shares outstanding, which sell for $78 each. Monkton has 24 million shares outstanding, which sell for $96 each. If the merger gains are estimated at $120 million, what is the highest price per share that Winterbourne should be willing to pay to Monkton shareholders? Highest price per share
Q: Denali Inc. is acquiring Whitney Corp. at an exchange ratio of 2:1. After the deal is announced,…
A: Merger arbitrage refers to the opportunity of earning profits from the disparity of the stock prices…
Q: Orilla Ltd is considering expansion by acquiring Norioll Ltd. The market value of the equity in…
A: A merger is the voluntary joining of two businesses on roughly equal footing to form a single legal…
Q: milon shares outstanding and is trading at $20 per share. Oxford Metal is thinking of bu eamings per…
A: Value of Associated Steel MPS x shares outstanding 60 Million 15 x 4 New shares to…
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 to earnings ratio after the merger using the…
Q: Hannahs is considering the acquisition of Shoe Clinic. . Hannahs has 43,000 shares outstanding at a…
A: In finance, the term business acquisition represents a corporate action in which one business…
Q: What profit or loss did Security Brokers incur if the issue were sold to the public at $8 / share?…
A: Underwriting refers to the contract or agreement between the two parties; one is company and second…
Q: his investment to be 10 percent. What is the benefit of the merger to the shareholders of The…
A: a) purchase consideration $400,000 The market value of…
Q: Both of Firm A and Firm B are 100 equity firms. You estimate that the incremental value of the…
A: Incremental Value of Acquistion = $100,000 Firm B agrees = $150,000 Exchange Ratio =…
Q: Marseille Manufacturing (MM) is considering an IPO. MM currently has 13 million shares outstanding…
A: The question is related to calculation of percentage of ownership after IPO. The same will be…
Q: Acquiring Corp. is considering a takeover of Takeover Target Inc. Acquiring has 12 million shares…
A: Given information: Acquiring Corp has 12 million shares at $20 each Target Corp has 6 million shares…
Q: Gobi Desserts is bidding to take over Universal Puddings. Gobi has 3,500 shares outstanding, selling…
A: Hey, since there are multiple subparts questions posted, we will answer first three question. If you…
Q: The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation.…
A:
Q: Asteric Corporation is evaluating acquisition of Jumbo Corporation. Asteric Corporation believes…
A: A change in share price post the contract has been established will not affect the initial contract.
Q: Rearden Metal Company has earnings per share of $2. It has 10 million shares outstanding and is…
A: Value of the company AS is calculated as price per share multiplied by the numbe rof shares…
Q: Corporation A is deciding on an acquisition. Corporation A would buy all shares of corporation B,…
A: Value of firm (dividend growth model) = whereg= Growth rateke- Required rate of return
Q: A hypothetical corporation, Cascade Strategic & Innovative Solutions, has decided to raise capital…
A: Share price refers to the amount being traded in the market for each share for purchasing and…
Q: In a deal valued at $7.4 billion including equity ($2.4 billion) and assumed debt ($5.5 billion)…
A: Stock Valuation is done by computing the PV of all the expected benefits that will be generated from…
Q: The owners of Arthouse Inc., a national artist supplies chain, are contemplating purchasing…
A: Financial statements are statements which states the business activities performed by the company .…
Q: Acquiring Corp. is considering a takeover of Takeover Target Inc. Acquiring has 10 million shares…
A: The term takeover refers to when an organization acquires another organization. The company…
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: 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: Required: Given the information above, calculate the value of Money Plus PLC using the following…
A: We are to use Track's P/E ratio. So let us calculate Track's P/E ratio. Track's P/E ratio = Market…
Q: 5. Suppose you are the sole owner of company ABC. The market value of your c $100 and there are 20…
A: When the combined value of entity is more than its individual added together, there is a synergy…
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: Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at…
A: The objective of this question is to calculate the earnings per share (EPS) of Rearden Metal after…
Q: AMC Corporation currently has an enterprise value of $390 million and $120 million in excess cash.…
A: The repurchase of shares involves buying shares from the market to reduce the equity ownership of…
Q: NewCo is trying to fully acquire OldCo in an all cash offer. NewCo will assume all the debt of OldCo…
A: Given, Expected Synergies from acquisition = $700 million Before acquisition no. of shares = 25…
Q: Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to…
A: Here, Current Dividend $ 1.92Growth Rate for 1 year20%Constant growth Rate after 1…
Q: McNabb Enterprises is considering going private through a leveraged buyout by management. Management…
A: a. If the prime rate is expected to average 10 percent over the next five years, the interest rate…
Q: Tecumseh Inc. is analyzing the possible merger with Devonshire Inc. Savings from the merger are…
A: The maximum cash price per share refers to the highest amount of cash that a company is willing to…
Q: Nataro, Inc is planning on merging with Celestia Corp. Nataro, Inc with will pay shareholders the…
A: A merger is a business combination that occurs when the operations of two or more companies are…
Q: Acquiring Corporation is considering a takeover of Takeover Target Incorporated. Acquiring has 16…
A: Here,No. of Shares of Acquiring Company is 16 millionPrice per Share of Acquiring Company is $30No.…
![Winterbourne is considering a takeover of Monkton Incorporated. Winterbourne has 29 million shares outstanding, which sell for $78
each. Monkton has 24 million shares outstanding, which sell for $96 each. If the merger gains are estimated at $120 million, what is the
highest price per share that Winterbourne should be willing to pay to Monkton shareholders?
Highest price per share](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69b80be5-d60a-407d-9dc9-8a880c236f55%2F3cc45865-4000-4ae3-8272-2f1b001ae5b4%2Fr853v1i_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Gobi Desserts is bidding to take over Universal Puddings. Gobi has 3,500 shares outstanding, selling at $55 per share. Universal has 2,500 shares outstanding, selling at $22.50 a share. Gobi estimates the economic gain from the merger to be $22,500. Required: If Universal can be acquired for $25 a share, what is the NPV of the merger to Gobi? What will Gobi sell for when the market learns that it plans to acquire Universal for $25 a share? (Round your answer to 2 decimal places.) What will Universal sell for? Assume that the market expects the merger to go through without any further bidding. What are the percentage gains to the shareholders of each firm? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Now suppose that the merger takes place through an exchange of stock. On the basis of the premerger prices of the firms, Gobi sells for $55, so instead of paying $25 cash, Gobi issues 0.45 of its shares for every Universal share acquired. What will be…Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden pays no premium to buy Associated Steel, then Rearden's price/earnings ratio after the merger will be closest to: Answer choices A) 12 B) 10.42 C) 7.80 D) 10George's Equipment is planning on merging with Nelson Machinery. George's will pay Nelson's shareholders the current value of their stock in shares of George's Equipment. George's currently has 4,600 shares of stock outstanding at a market price of $31 a share. Nelson's has 1,600 shares outstanding at a price of $38 a share. What is the value per share of the merged firm?
- Nataro, Inc is planning on merging with Celestia Corp. Nataro, Inc with will pay shareholders the current value of their stock using shares of Nataro as the form of payment. Nataro has 5600 shares outstanding at a market price of $27.25 per share. Celestia Corp has 8,000 shares outstanding at a market price of $5.75 per share. The expected synergy created by the merger is $4200. What is the value of the merged firm (excludes cost of acquisition)? A. 205600 B. 201400 C. 159600 D. 54400 E. 68750Corporation A is deciding on an acquisition. Corporation A would buy all shares of corporation B, for a total of 500,000 shares of B. Currently, corporation B is expected to pay a constant dividend forever of $12 per share. The market price of B shares reflects these expectations, and the required rate of return is 4%. A can buy B shares at their current market price, and management expects to be able to exploit synergies between the two corporations and increase revenues. Thus, according to A’s management, if the acquisition takes place the dividend per share for next year is expected to be $12, but dividends are then expected to grow forever at a rate of 3% per year. The required rate of return on stock B would stay unchanged at 4%. What is the NPV of the acquisition? .Oxford Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Oxford Metal is thinking of buying Memphis Stee which has eamings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Oxford Metal will pay for Memphis Steel by issuing new shares There are no expected synergies from the transaction. If Oxford pays no premium to buy Memphis Steel, then Oxfords price-eamings ratio ater the merger will be closest to: O A. 8.7 B. 7.8 OC. 10.0 O D. 10.42 OE 120
- Tecumseh Inc. is analyzing the possible merger with Devonshire Inc. Savings from the merger are estimated to be a one-time after-tax benefit of $156 million. Devonshire Inc. has 5.2 million shares outstanding at a current market price of $82 per share. What is the maximum cash price per share that could be paid for Devonshire Inc.? (Omit "$" sign in your response.) Maximum cash price per share $e. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden pays no premium to buy Associated Steel, then Rearden's price-earnings ratio after the merger will be closest to: 10.0. 10.42. 12.0. 7.8.Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel, then the price per share of the combined corporation after the merger will be closest to: Answer choices: A) $17.20 B) $26.00 C) $20.00 D) $19.12
- Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction.If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel, then Rearden's earnings per share after the merger will be closest to: $1.84. $1.90. $2.00. $2.25.Orilla Ltd is considering expansion by acquiring Norioll Ltd. The market value of the equity in Oriolla is $ 126 million and Norioll is $ 21 million. The takeover is expected to increase in after-tax operating cash flows of $ 3 million in perpetuity. Orilla is considering a cash offer of $ 29.4 million to Norioll shareholders for all their shares OR issue new shares of Orilla to Norioll so that they will own 20 % of the combined entity after the merger. The cost of capital for both companies is 12 % a)What is the gain in present value terms for the merger? b) What are the cost of the cash offer and share offer to Oriolla? c) What is the NPV of the acquisitions from Oriolla's perspective of the cash offer and the share offer?AMC Corporation currently has an enterprise value of $390 million and $120 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $590 million or $190 million. Suppose AMC management expects good news to come out. If management wants to maximize AMC's ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out? What effect would you expect an announcement of a share repurchase to have on the stock price? To maximize its share price, when will AMC prefer to repurchase shares? (Select the best choice below.) O A. After either good or bad news comes out. B. After good news and before bad news comes out. C. Before either good or bad news comes out. D. Before good news and after bad news comes out.…
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)