Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Merger Bid
Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.6%. Assume that the risk-free rate of interest is 6% and the market risk premium is 7%. Both Vandell and Hastings face a 40% tax rate.
Vandell's free cash flow (FCF0) is $2 million per year and is expected to grow at a constant rate of 6% a year; its beta is 1.10.
Hastings estimates that if it acquires Vandell, interest payments will be $1,600,000 per year for 3 years after which the current target capital structure of 30% debt will be maintained. Interest in the fourth year will be $1.411 million after which interest and the tax shield will grow at 6%. Synergies will cause the free cash flows to be $2.4 million, $3.0 million, $3.5 million, and then $3.67 million, after which the free cash flows will grow at a 6% rate. Assume Vandell now has $10.73 million in debt.
Indicate the range of possible prices that Hastings could bid for each share of Vandell common stock in an acquisition. Round your answers to the nearest cent. Do not round intermediate calculations.
The bid for each share should range between $ per share and $ per share.
An analyst evaluating securities has obtained the following information. The real rate of interest is 3% and is expected to remain constant for the next 5 years. Inflation is expected to be 2.1% next year, 3.1% the following year, 4.1% the third year..
you are required to develop a case study for a company or product of your choice evaluating the supply chain. in the
Charlie's Cycles Inc. has $170 million in sales. The company expects that its sales will increase 10% this year. Charlie's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. What are yo..
Essary Enterprises has bonds on the market making annual payments, with twelve years to maturity, a par value of $1,000, and selling for $972. At this price, the bonds yield 7.1 percent. What must the coupon rate be on the bonds?
Identify specific fraud risk present during PwC's audits of the Lipper hedge funds. Explain how Pwc should have responded to the fraud risk factors that you identified.
What actions are available to a financially-troubled company? Discuss both non judicial and judicial actions. What are the advantages and disadvantages of each? Please give me some reference
Discuss the following topic- "Should speculators use currency futures or options" - Options enable speculators to select the degree of downside risk that they are willing to tolerate.
Using this historical data I need to construct a forecasted profit and loss statement for the clinic's averday day for all of 2009 assuming the status quo. (no changes in utilizization, is the clinic projected to make a profit?)
A nursing home projects asset growth at 10 percent per year over the next 1o years. If it wishes to reduce its reliance on debt financing, what rate of equity growth over the 10 year period will be desired? Is it.
Calculate the companys overall cost of capital - What happens to the cost of equity as more debt gets used relative to equity?
Two confidential reports were found available to the public press after controls over confidentiality were found to be working as planned with compensating controls. These events revealed information that would not result in a significant loss to the..
Discuss various strategies to put in place that would reduce disbursement costs and you are the financial manager for a mid-sized company with 10 locations throughout the United States.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd