World Enterprises is determined to report earnings per share of $2.80. It therefore acquires the Wheelrim and Axle Company. Thereare no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares toensure its $2.80 earnings per share objective.a. Complete the table below for the merged firm.b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle?c. What is the cost of the merger to World Enterprises?d. What is the change in the total value of the World Enterprises shares that were outstanding before the merger?Complete this question by entering your answers in the tabs below.Required ARequired BRequired CRequired DHow many shares of World Enterprises are exchanged for each share of Wheelrim and Axle?Note: Do not round intermediate calculations and enter your answer rounded to 2 decimal places.Shares exchanged for each share< Required ARequired C >

To determine the number of World Enterprises shares exchanged for each Wheelrim and Axle share, we…

Answered: World Enterprises is determined to…

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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Chapter 2. 1. On 12/31, Choco acquired all assets and liabilities of Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share and this combination is a statutory merger (Cake was dissolved). Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding Choco Book Values Cake Book Values Cake Fair Values Cash and Receivable 350,000 180,000 170,000 Inventories 250,000 100,000 150,000 Land 700,000 120,000 240,000 Building and equipment 600,000 600,000 900,000 Patented technology 100,000 0 60,000 Accounts payable 300,000 120,000 150,000 Long-term debt 0 400,000 350,000 Common stock 750,000 300,000 Additional paid in capital 500,000 60,000 Retained earnings 12/31 450,000 120,000 Revenues 350,000 160,000 Expenses 310,000…
In order to calculate the consolidated net income, shouldn't it be: (operating income of purple + net income of green)? With Green being calculated as: Dividend Income for orange (28000*.1), and equity method income for yellow (58750*.4) Total=89,600 + 2,800 + 23,500 = 115,900?
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
Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table: Apex Pinnacle $845 $120 40 36 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share. P/E ratio Dividend payout ratio Assume that there are no synergistic benefits as the result of the merger. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places): a. 10 percent premium for Pinnacle $ b. 20 percent premium for Pinnacle $ c. 30 percent premium for Pinnacle $2,190 $ 280 70 72 $ $ $ 4.00 2.00 18 50% $ $ 3.00 1.20 12 40%
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
The holdings on the VE Commercial Vehicles with 45, 6% and the cellcentric with 50% are classified as joint ventures within the Volvo Group. Please explain the difference between joint venture and joint operations. Is there a different accounting treatment for consolidation?
In a split - off transaction, if the subsidiary's book value is $150 million, and the parent company decides to distribute 80% of the subsidiary's book value to the shareholders of the new entity, how much will a shareholder holding 100 shares in the new entity receive in cash? Assume that the company has 1.25 million shares outstanding.

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