User Account

All Pages

Calculate the price of albridges share price

Assignment Help Financial Management
Reference no: EM131306356

Albridge plc is planning to buy the whole of Woodier plc's equity for cash. At present no news has been officially released to the market, and senior management are concerned as to how the share price of Albridge plc will react to the news. They have agreed that the following timetable is appropriate, Note Day 0 is today:

Day 0: Share price of albridge plc =5.00 200M shares in issue

   Share price of Woodier plc =2.00 50M shares in

Day 1: Albridge offers 2.40 per Woodier plc share

Day 3: Albridge plc expects savings as a result of the takeover of 10M p.a.. These will not be announced untill Day 6

Day 6: Albridge plc announces the saving of 10M p.a.

Albridge plc uses discount rate of 10%

Required:

Calculate the price of Albridges share price, given the information above, under conditions of semi strong, and strong from efficiency?

Reference no: EM131306356

Questions Cloud

How many checks would randy have to write : Randy, a student, has $500 to deposit in a new checking account, but Randy knows he will not be able to maintain a minimum balance.- How many checks would Randy have to write each month for the account at South Trust to be the better option?
Value bond is currently selling in the marketplace : A $1,000 par value bond is currently selling in the marketplace. It had an original maturity of 25 years and was sold 14 years ago. Its coupon rate is 6% and you are to determine its current price, given bonds of comparable risk have a yield to matur..
What are the consequences of given actions : Based on his balance, Paul writes a check for a new stereo for $241.00. Paul has no intention of making a deposit in the near future. What are the consequences of his actions?
How will technology continue to change the way we understand : how will technology continue to change the way we understand organizational theory and development?The world has changed in the way in which organizations are structured and it will continue to change as the force of globalization becomes more pron..
Calculate the price of albridges share price : Albridge plc is planning to buy the whole of Woodier plc's equity for cash. At present no news has been officially released to the market, and senior management are concerned as to how the share price of Albridge plc will react to the news. Calculate..
Did the magazine make an impact on popular culture : What is the main point of the article? What is the writer's message to his/ her readers? Did the magazine make an impact on popular culture?
Analysing and evaluating digital marketing strategies : The purpose of this report is to develop your skills in analysing and evaluating digital marketing strategies & seamlessly integrating them with brick and mortar marketing strategies.
What is the balance shown this month on marys bank statement : Mary's last bank statement showed an ending balance of $168.51.- What is the balance shown this month on Mary's bank statement? What is the adjusted bank balance?
Call option with an initial premium : For a ?$1.50/£ call option with an initial premium of ?$0.033/£ and a lambda of? 0.4, after an increase in annual volatility of 1 percent point - for example from? 10% to? 11% - the new option premium would? be:

Reviews

Write a Review

Financial Management Questions & Answers

  Weaves cotton placemats to sell at local crafts shop

Each autumn, as a hobby, Suzanne De Angelo weaves cotton placemats to sell at a local crafts shop. The mats sell for $20 per set of four. The shop charges a 10% commission and remits the net proceeds to De Angelo at the end of December. De Angelo has..

  Issued bonds with year maturity then and at coupon rate

Three years ago, JKL Co. issued bonds with a 15-year maturity then and at a coupon rate of 8.1 percent. The bonds make semiannual payments. If the YTM on these bonds is 9.3 percent, what is the current bond price? (Do not include the dollar sign ($).

  This strategy is called as bear spread

You have purchased a call option (100 contracts) on Mercer Corporation common stock. The option has an exercise price of $20.00 and Mercer’s stock currently trades at $20.00. Calculate your net profit on the option if Mercer Corporation’s stock price..

  How much can you withdraw each year in your retirement

You are planning your retirement in 10 years. You currently have $162,000 in a bond account and $602,000 in a stock account. You plan to add $7,800 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..

  Profit diagram for the straddle mentioned

An investor purchases a call on a stock, with an exercise price of $45 and premium of $3, and a put option with the same maturity that has an exercise price of $45 and premium of $2. Please draw a payoff diagram and a profit diagram for the ‘straddle..

  Trading activities performed by financial institutions

A U.S. bank has made £50 million in Britain and has £40 in deposits. The bank's currency trading desk has also contracted to buy £20 million and has short positions of £15 million. What is the bank's net exposure? If the bank has exposures in euros a..

  Differ from a protective call in terms of the objective

How does a covered call differ from a protective call in terms of the objective, advantages and disadvantages of each strategy?

  How much will each annual payment be

Big Brothers, Inc. borrows $460,368 from the bank at 6.85 percent per year, compounded annually, to purchase new machinery. This loan is to be repaid in equal annual installments at the end of each year over the next 8 years. How much will each annua..

  How many years will it take him to pay off the credit card

Your friend currently owes $22,000 on his credit card with and has asked your advice. The credit card charges an APR of 15% monthly compounded. If your friend pays back $275.00 per month how many years will it take him to pay off the credit card (to ..

  What was charge for depreciation and amortization

Pearson Brothers recently reported an EBITDA of $7.5mil and net income of $1.8million. It had $2.0 mil of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?

  What is the cash break-even quantity

A project has the following estimated data: price = $79 per unit; variable costs = $46.61 per unit; fixed costs = $5,600; required return = 12 percent; initial investment = $6,000; life = six years. Ignore the effect of taxes. What is the cash break-..

  A central issue for its senior managers

The strategic positioning of your chosen organisation is a central issue for its senior managers. As you know from your readings, strategic positioning has two important themes: strategic potential and organisational ambitions (page 46 of your text -..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd