- The possible value of combined company, Merger: Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one. Debt: Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets. Equity: Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

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Answer 1

Question

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

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Answer 2

Question

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Expert Solution & Answer

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Answer 3

Question

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Expert Solution & Answer

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Answer 4

Question

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Expert Solution & Answer

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Answer 5

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Answer 6

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

Answer 7

Chapter 29, Problem 16QP

a.

Summary Introduction

To calculate:-The possible value of combined company,

Merger:

Merger means combining the two entities into one new entity, where the shareholders of both the companies merge their resources into new company. Merger is basically the result of merger, the two or more companies into one.

Debt:

Debt is the amount of money borrowed by an individual or a company forming a liability upon their assets.

Equity:

Equity is the amount invested by the shareholder’s of the company. Shareholders are known as the owner of the company as they are invested their capital into the company. Equity shareholders get dividend, which is not fixed and that depends upon the profitability of the company.

Answer 8

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

Answer 9

b.

Summary Introduction

To calculate:-The possible value of end-of-period debt and stock after merger.

Answer 10

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Answer 11

c.

Summary Introduction

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 29 - Prob. 1CQ Ch. 29 - Prob. 2CQ Ch. 29 - Prob. 3CQ Ch. 29 - Prob. 4CQ Ch. 29 - Prob. 5CQ Ch. 29 - Prob. 6CQ Ch. 29 - Economies of Scale What does it mean to say that a...Ch. 29 - Prob. 8CQ Ch. 29 - Prob. 9CQ Ch. 29 - Prob. 10CQ

Solution Summary: The author explains how to calculate the possible value of a combined company.

To calculate:-The possible value of end-of-period debt and stock after merger.

To explain: The bondholders are better off and the stockholders are worse off in the combined firm.

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Chapter 29 Solutions