Your company has earnings per share of $4.49. It has 1.621 million shares outstanding, each of which has a price of $45.00. You are thinking of buying TargetCo, which has earnings per share of $1.50, 1.335 million shares outstanding, and a price per share of $21.00. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will your earnings per share be after the merger? b. Suppose you offer an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 15% premium to buy TargetCo. What will your earnings per share be after the merger? c. What explains the change in earnings per share in part (a)? Are your shareholders any better or worse off? d. What will your price-earnings ratio be after the merger (if you pay no premium)? How does this compare to your P/E ratio before the merger? How does this compare

Your company has earnings per share of $4.49. It has 1.621 million shares outstanding, each of which has a price of $45.00. You are thinking of buying TargetCo, which has earnings per share of $1.50, 1.335 million shares outstanding, and a price per share of $21.00. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will your earnings per share be after the merger? b. Suppose you offer an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 15% premium to buy TargetCo. What will your earnings per share be after the merger? c. What explains the change in earnings per share in part (a)? Are your shareholders any better or worse off? d. What will your price-earnings ratio be after the merger (if you pay no premium)? How does this compare to your P/E ratio before the merger? How does this compare

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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Abel, Inc. just paid a dividend of $3.0 per share and you think they will continue to pay $3.0 per year indefinitely. If the appropriate discount rate is 11%, how much should the price of a share be? (Answer to the nearest penny.)
Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang's current value of equity is $57 million. Zang currently has 4 million shares outstanding and will issue 1.2 million new shares. ESM charges a 6% spread. What is the correctly valued offer price? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much cash will Zang raise net of the spread (use the rounded offer price)? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar. $
You are considering investing in Henderson Engineers Ltd. The book value of shareholders' equity is $40,0000,000. The firm has made a net profit of $ 660,000 for the year ending 30 June 2023. The earnings per share is $1.30. You also find the PE ratio for firms similar to Henderson is 12. a) What is the book value per share for Henderson Engineers Ltd? b) What price would you expect Henderson shares to sell for? c) Explain would you invest in this share and why.
Please fast answer. Your company is considering an issue of preference shares. The market is currently expecting a return of 7 percent and your company expects earnings per share to be $10.10 and the dividend for preferenceshares to be $1.40. i) What will be the issue price of a preference share? $20
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Flemington Farms is evaluating an extra dividend versus a share repurchase. In either case, $15,000 would be spent. Current earnings are $2.80 per share, and the stock currently sells for $75 per share. There are 2,800 shares outstanding. Ignore taxes and other imperfections. The PE ratio will be ____ if the firm issues the dividend as compared to ____ if the firm does the share repurchase.
Vijay
2) You bought 1500 shares of Microsoft one year ago for $120 per share. Microsoft paid a $2 (per-share) dividend last year. The current stock price is $105. a. What rate of return did you earn from your Microsoft investment? b. Ifinflation rate over the last year was 4%, what is your real rate of return? c. Rather than buying 1500 Microsoft shares a year ago, you instead sold them short. What is the rate of return from your Microsoft trade now? Focu MacBook Pro A
Blue Corp. is evaluating an extra dividend versus a share repurchase. In either case, $5,500 would be spent. Current earnings are $1.11 per share and the stock currently sells for $42 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections. If Blue Corp. pays a dividend, what will be the dividend per share? After the dividend is paid, how many shares will be outstanding and what will the price per share be? Enter your answers rounded to 2 DECIMAL PLACES. NOTE: Fractional shares are possible (Ex. 0.49 shares) Dividend 2.2 ☑ Correct response: 2.2±0.01 Shares outstanding = 2500 Correct response: 2,500 Stock price = 39.8 Correct response: 39.8±0.01 Click "Verify" to proceed to the next part of the question. After the $2.2 dividend, the price falls to $39.8 per share. What are earnings per share (EPS) and the price earnings (P/E) ratio? Enter your answers rounded to 2 DECIMAL PLACES. EPS = Number P/E RatioNumber Click "Verify" to proceed to the next part of the…
Suppose that Kaka Plc currently is selling at $50 per share. You buy 900 shares using $22,050 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required If the maintenance margin is 20%, how low can Kaka Plc’s price fall before you get a margin call? (Round your answer to 2 decimal places.)
Please answer is 24840, only post if your answer comes this with explanation and concept. Thabks!
Winston Sporting Goods is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $18.40 per share for 670,000 shares. The company will receive $16.75 per share and will incur $225,000 in registration, accounting, and printing fees. 1. What is the spread on this issue in percentage terms? 2. What are the total expenses of the issue as a percentage of the total value (at retail)?

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