Share price you should be willing to pay for acquisition

Assignment Help Financial Management
Reference no: EM131354387

Assume the firm has $104,642 (000) debt outstanding, and there is $210,000 (000) in surplus cash. If the firm has 20.75 million shares outstanding,

What is the maximum per share price you should be willing to pay for this acquisition?

If the current standalone value of the firm’s stock is $15 per share, what is the value of the synergy being created?

Reference no: EM131354387

Questions Cloud

Explain what is reason behind design of such contract : Consider two companies that do business together, but do not share a common currency: an exporter and importer. The companies would like to design a contract to share real exchange rate risk. First, explain what is the reason behind the design of suc..
Calculate the net present value under each option : Your Company is evaluating the acquisition of a new piece of equipment that has an installed cost of $ 10,000,000. The equipment will add $2,000,000 to earnings before interest and taxes each year for the next 12 years. Calculate the payback period f..
Stock has annual return mean and standard deviation : Tyler Trucks stock has an annual return mean and standard deviation of 12 percent and 41 percent, respectively. Michael Moped Manufacturing stock has an annual return mean and standard deviation of 23.0 percent and 67 percent, respectively. What is t..
Result of the increased weight capacity : One of the challenges of the future is how to increase truck carrying capacity as well as fuel efficiency. View the video on this link “Freightliner Super Truck” which describes the features of a concept truck designed by Freightliner. How much could..
Share price you should be willing to pay for acquisition : Assume the firm has $104,642 (000) debt outstanding, and there is $210,000 (000) in surplus cash. If the firm has 20.75 million shares outstanding, What is the maximum per share price you should be willing to pay for this acquisition?
How can one account for changes in annual benefits : As an associate economist working for a consulting firm, you have been assigned to analyze some information regarding a proposal to build a dam. How can one account for changes in annual benefits or costs over time in a discounting framework? What sh..
Now ready to start their savings plan for the big event : Bob and Carol are planning for the birth of their first child exactly four years from today. They are now ready to start their savings plan for the big event. The current hospital cost for having a healthy baby at the local hospital is $6500 after al..
Calculate expected return : Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .30 −.08 Boom .70 .19 Required: Calculate the expected return.
Common stock of flavorful teas has expected return : The common stock of Flavorful Teas has an expected return of 17.00 percent. The return on the market is 11 percent and the risk-free rate of return is 3.5 percent. What is the beta of this stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Verify that put call parity holds

Use DerivaGem to value the option assuming it is a European call. - Use DerivaGem to value the option assuming it is a European put.

  Accounting break-even production quantity for project

The accounting break-even production quantity for a project is 12,320 units. The fixed costs are $187,400 and the contribution margin per unit is $18.10. The fixed assets required for the project will be depreciated on straight-line basis to zero ove..

  Estimate the value of the companys stock

You can estimate the value of a company's stock using models such as the corporate valuation model and the dividend discount model. Which of the following companies would you choose to evaluate if you were using the corporate valuation model to estim..

  Return on riskier stock exceed that on less risky stock

Required Rate of Return Stock R has a beta of 2.4, Stock S has a beta of 0.65, the expected rate of return on an average stock is 13%, and the risk-free rate is 6%. By how much does the required return on the riskier stock exceed the required return ..

  Calculate the companys debt-to-equity ratio

Boulder Mountain Ski Company has total assets of $429,300,000 and a debt ratio of 0.27. Calculate the company’s debt-to-equity ratio.

  What are the desirable attributes

What are the desirable attributes of a successful portfolio manager? What was the problem with the early performance measures and how have the modern composite portfolio performance measures overcome this problem

  What is new yield to maturity on the bond

You buy a bond for $994 that has a coupon rate of 6.1% and a 5-year maturity. A year later, the bond price is $1,184. (Assume a face value of $1,000 and annual coupon payments.) What is the new yield to maturity on the bond?

  What is the effective rate for three-month bills

Assume that 3-month Treasury bills totaling $32 billion were sold in $10,000 denominations at a discount rate of 6.650%. In addition, the Treasury Department sold 6-month bills totaling $30 billion at a discount rate of 6.595%. What is the discount a..

  What is the value of the stock today

Microtech Corporation is expanding rapidly, and it currently needs to retain all of its earnings, hence it does not pay any dividends, with the first dividend of $1.00 coming 3 years from today. The dividend should grow rapidly—at a rate of 50 percen..

  Future value of an annuity-retirement age

Your client is 31 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $8,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average ret..

  Calculate present value of each of anticipated dividends

Beasley Ball Bearings paid a dividend of $4 last year. The dividend is expected to grow at a constant rate of 3 percent over the next five years. The required rate of return is 11 percent. Compute the anticipated value of the dividends for the next f..

  Considering paying off this high interest rate loan

Eric borrowed money last year to buy a new car for his part-time consulting work. The loan is a 3-year loan with 36 monthly payments. Due to his bad credit history, the loan he got is with a 12% annual interest rate compounded monthly. If Eric saved ..

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!

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