General Meters is considering two mergers. The first is with Firm A in its own volatile industry, the auto speedometer industry, while the second is a merger with Firm B in an industry that moves in the opposite direction (and will tend to level out performance due to negative correlation). \table [[General Meters Merger with Firm A, General Meters Merger with Firm B,], [Possible Earnings ($ in, Possible Earnings ($ in,,,], [millions), Probability,0.20, $20, Probability], [$ 20, 0.40, 35, 0.15,], [35, 0.40, 50, 0.50,], [50,, 0.35,,]] a. Compute the mean, standard deviation, and coefficient of variation for both investments Note: Do not round intermediate calculations. Enter your answers in millions. Round "Coefficient of variation" to 3 decimal places and "Standard deviation" to 2 decimal places. \table[[, Merger A, Merger B], [Mean,,], [Standard deviation,,], [Coefficient of variation,,]] b. Assuming investors are risk-averse, which alternative can be expected to bring the higher…

Bentley Corporation and Rolls Manufacturing are considering a merger. The possible states of the economy and each company’s value in that state are shown here:   State Probability Bentley Rolls Boom .70 $ 330,000 $ 300,000 Recession .30 130,000 100,000   Bentley currently has a bond issue outstanding with a face value of $145,000. Rolls is an all-equity company.

Bentley Corporation and Rolls Manufacturing are considering a merger. The possible states of the economy and each company’s value in that state are shown here:   State Probability Bentley Rolls Boom .70 $ 330,000 $ 300,000 Recession .30 130,000 100,000   Bentley currently has a bond issue outstanding with a face value of $145,000. Rolls is an all-equity company.

3. Merger valuation and discounted cash flows When a merger takes place between two companies to form a single firm, the target company does not continue identity. Consider the following scenario: continues does not continue to operate as a separate Newtown Propane Inc. is considering an acquisition of Pirtucon Co., and estimates that acquiring Pirtucon will result in incremental after- tax net cash flows in years 1-3 of $5 million, $7.5 million, and $9 million, respectively. After the first three years, the incremental cash flows contributed by the Pirtucon acquisition are expected to grow at a constant rate of 5% per year. Newtown's current beta is 0.80, but its post-merger beta is expected to be 1.04. The risk-free rate is 4.5%, and the market risk premium is 6.60%. Based on this information, complete the following table by selecting the appropriate values. (Note: Round your intermediate calculations to two decimal places.) Post-merger cost of equity Projected value of the cash…

21. Which of the following are generally true about wealth gains or losses to stockholders following a merger? A. Stockholders of the target firm have zero or negative wealth gains B. Stockholders of the acquiring firm have zero or negative wealth gains C. Stockholders of competing firms have zero or negative wealth gains D. Stockholders of the target firm have positive wealth gains E. Both B and D 22. Empirical research about the method payment for mergers has shown that A. Returns for acquiring firm stockholders are much lower when cash is used for payment B. Returns for target firm stockholders are much lower when cash is used for payment C. Returns for competing firms are much lower when cash is used for payment D. Returns for acquiring firm stockholders are much higher when cash is used for payment E. None of the above 23. If a firm wishes to expand geographically, it is often preferable to do it by acquiring an existing firm rather than greenfield entry, because A. The…

With a minimum of five (5) journal articles, examine the determinants of interest rates in developed and developing economies. QUESTION 3 Describe briefly some of the important contributing factors which explain why share- holders of acquiring companies rarely benefit from takeovers.

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Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next. An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings. Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Dividends per share Common stock (price per share) $ +A Wilson $84 $21 8 $ 2.625 $ 2.00 $34 Blanchard $74 $9.0 6 Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the nearest cent. $1.50 $ 1.10 $15.00

The following three Fls dominate a local market and their total assets are given below. Institution Asset Size Bank A $50 million Bank B $60 million Bank C $90 million Under the 1982 guidelines, would the Fed approve the merger of Banks A and C? It is likely to approve because it is not a concentrated market. It is unlikely to approve because the post-merger HHI has increased by over 100. It is likely to approve because the post-merger HHI has increased by over 100. Likely to approve because the post-merger HHI has increased by less than 5,000. It is unlikely to approve because the post-merger HHI has increased by an amount over 5,000.