What is the control premium percentage offered

Assignment Help Financial Management
Reference no: EM131315586

Mega Service Corporation (MSC) is offering to exchange 2.5 shares of its own stock for each share of target firm Norman Corporation stock as consideration for a proposed merger.

There are ten million Norman Corp shares outstanding, and its stock price was $60 before the merger offer. MSC's preoffer stock price was $30. What is the control premium percentage offered?

Now suppose that when the merger is consummated eight months later, MSC's stock price drops to $25. At that point, what is the control premium percentage and total transaction value?

Reference no: EM131315586

Questions Cloud

What are total liabilities from your balance sheet : What is the net income to 2 decimal places for January - What was the total debit to the purchases account for January and What are the total Liabilities and Equity from your balance sheet?
Conduct comprehensive background checks : You are the HR Manager of a large child care center. The CEO has asked you to prepare a 2-3 page paper addressing how to conduct comprehensive background checks on employees hired to work with children.
What role does material play in the development of society : What role does material play in the development of society? Should it play a greater or lesser role? Why? Can human development and interaction be exclusively explained in material terms, or not? Why, or why not
Sketch the distribution of strain : Consider a symmetric laminated beam with three laminae of equal thickness. The top and bottom laminae are made out of steel.
What is the control premium percentage offered : There are ten million Norman Corp shares outstanding, and its stock price was $60 before the merger offer. MSC's preoffer stock price was $30. What is the control premium percentage offered?
Should you recommend acquiring monroe hospitality to the ceo : You are the director of capital acquisitions for Morningside Hotel Company.- Should you recommend acquiring Monroe Hospitality to your CEO?
Compute the in-plane and shear strains : Compute the reduced stiffness [Q] and compliance [S] matrices, and the intralaminar shear stiffness [Q∗ ] and compliance [S ∗ ] matrices for a lamina with E1 = 35 GP a, E2 = 3.5 GP a, ν12 = 0.3, G12 = 1.75 GP a, G23 = 0.35 GP a
Evaluating recruitment effectiveness : What approach to evaluating recruitment effectiveness would you recommend for a mid-size service delivery business such as an accounting firm? Why?
Explain briefly each of the four noble truths : PHI 216-01 and 051 Religions of the East Final Exam. Explain at least three significant differences between the Mahayana and Theravada (Hinayana) Buddhism. Discuss two of the five virtues of Confucianism and why you consider these two virtues to be i..

Reviews

Write a Review

Financial Management Questions & Answers

  What is its self-supporting growth rate

Sales Increase Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,800,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of account..

  What is the value of the firms preferred stock

Can you explain the Zero Growth Model and solve this problem? A firm has to pay a dividend of $1.20 per share till perpetuity, a zero growth rate of dividends, and a required return of 10 percent. What is the value of the firm's preferred stock?

  Find the present value of the following ordinary annuities

Find the present value of the following ordinary annuities: a. $400 per year for 10 years at 10% b. $200 per year for 5 years at 5% c. $400 per year for 5 years at 0% d. Now rework parts a, b, and c assuming that payments are made at the beginning of..

  Quantitative problem-investor plans to hold the stock

The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 3% rate after Year 5. The firm has $26 million of market-value debt, but it has no preferred stock or any other outstanding claims. According to the valua..

  What is the geometric mean yearly percent increase

The Haidden Manufacturing Co. noted in its 2015 second-quarter report that as of June 30, 2012, notes payable amounted to $2,840 million. For the same date in 2005, they were $1,130 million. What is the geometric mean yearly percent increase (June to..

  What is the total reportable gross income from all sources

The Sandler family consists of two married adults, and two teenagers. Mr. and Mrs. Sandler will file their IRS return as a joint return. What is the total reportable gross income from all sources? After they put $5600 into qualified retirement plan a..

  Your local small business association is organizing the

your local small business association is organizing a workshop centered upon the impact of corporate culture on

  What is the NPV and IRR of the project

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$592,000 1 222,000 2 165,000 3 230,000 4 209,000 All cash flows will occur in Erewhon and are expressed in dollars...

  Coupon bonds on the market

Aloha Inc. has 8 percent coupon bonds on the market that have 13 years left to maturity. If the YTM on these bonds is 10.42 percent, what is the current bond price?

  Representative investors average degree of risk aversion

Calculate total risk, systematic risk and firm-specific risk for Apple - What is the representative investors average degree of risk aversion

  Calculate the range of opportunity costs of capital

The Titanic Shipbuilding Company has a noncancelable contract to build a small cargo vessel. Construction involves a cash outlay of $259,000 at the end of each of the next two years. Use the IRR rule to calculate the (approximate) range of opportunit..

  Preferred stock pays a dividend

Carter’s preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $45.00, what is its nominal (not effective) annual rate of return?

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