PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
15th Edition
ISBN: 9780137695621
Author: SMART
Publisher: PEARSON C
Question
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Chapter 18, Problem 18.10P

a)

Summary Introduction

To determine: Earnings per share for Company G&S for the each of the next 5 years without the merger.

Introduction:

Grouping of two or more companies and the identity of one company is taken by the resulting company is termed as mergers. Merger is where a large firm mergers the small firms.

b)

Summary Introduction

To determine: The earnings of G Company in each of the next 5 years.

Introduction:

Grouping of two or more companies and the identity of one company is taken by the resulting company is termed as mergers. Merger is where a large firm mergers the small firms.

c)

Summary Introduction

To construct: The graph of premerger and post-merger EPS

d)

Summary Introduction

To discuss: The recommendation on the above parts for G&S Company

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General Finance Question
Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896
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