What is the ratio of exchange

Assignment Help Finance Basics
Reference no: EM131110333

Willow Enterprises is considering the acquisition of Steadfast Corp. in a stock swap transaction. Currently, Willow's stock is selling for $45 per share. Although Steadfast's shares are currently trading at $30 per share, the firm's asking price is $60 per share.

a. If Willow accepts Steadfast's terms, what is the ratio of exchange?

b. If Steadfast has 15,000 shares outstanding, how many new shares must Willow issue to consummate the transaction?

c. If Willow has 110,000 shares outstanding before the acquisition, and earnings for the merged company are estimated to be $450,000, what is the EPS for the merged company?

Reference no: EM131110333

Questions Cloud

Calculate the ratio of exchange and the ratio of exchange : The transaction would require Phylum to swap its shares for those of Taxonomy, which would be paid $60 per share. Calculate the ratio of exchange and the ratio of exchange in market price for this transaction.
Show how this can be implemented : An intuition of how to escape such a trap is that, when the robot hits a wall, it follows the wall until the number of right turns equals the number of left turns. Show how this can be implemented, explaining the belief state, the belief-state tra..
Fresh water supply system : A developer of a housing complex on an off-shore island is considering building a pipeline connecting to the fresh water supply system of the government in replacing the existing desalination plant. Assuming the daily use of water is 240 m3 calculate..
Young programmers than old programmers : When Richard Stallman founded the Free Software Foundation in 1985, he was able to tap into the energy of many programmers around the world who wanted to work on a free operating system.
What is the ratio of exchange : Although Steadfast's shares are currently trading at $30 per share, the firm's asking price is $60 per share. If Willow accepts Steadfast's terms, what is the ratio of exchange? If Steadfast has 15,000 shares outstanding, how many new shares must Wil..
Compute the amount of the lease receivable : Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2010, 2011, and 2012.
Calculate the weighted average cost of capital : Based on the information below, calculate the weighted average cost of capital. Great Corporation has the following capital situation.
What will happen to american wages employment and prices : What will happen to American wages, employment, and prices? Should more strict policies on immigration and free trade be enforced? Are there parallels between the Trump attitude toward trade and immigration and the British decision to LEAVE the EU..
With limited memory and storage facilities : In the 1970s, computers (even minicomputers) were very expensive. Since no one had their own computer, people had to share. Compared to today, computers in the 1970s were slow, with limited memory and storage facilities.

Reviews

Write a Review

Finance Basics Questions & Answers

  Discuss this viewpoint should the farmer estimate his or

a corn farmer argues i do not use futures contracts for hedging. my real risk is not the price of corn. it is that my

  What is the maximum initial investment

What is the maximum initial investment for which this project is acceptable if the pre-tax required return on debt is 8% and the required return on equity is 18%?

  What is the firm after-tax cost of debt

The Carriage house issued 10-year, 8 percent semiannual bonds 3 years ago. The bonds currently sell at 99.5 percent of face value. What is the firm's after-tax cost of debt if the tax rate is 32 percent?

  Jemisens firm has expected earnings before interest and

jemisens firm has expected earnings before interest and taxes of 1500. its unlevered cost of capital is 15 percent and

  What was the original issue price

Bedford Mattress Co. issued preferred stock many years ago. It carries a fixed dividend of $12 per share. With the passage of time, yields have gone down from the original 11% to 10% (yield is the same as the required rate of return)

  Example of a perpetuity or an annuity

Give your own example of a perpetuity or an annuity, explaining what type it is and calculating its present (or future) value.

  Made an equal dollar investment in each stocks

From Yahoo!Finance obtain a report on any two companies. a. What are the betas listed for these companies? b. If you made an equal dollar investment in each stocks what would be the beta of your portfolio?

  Irrelevant to the capital budgeting decision

1. True or False Opportunity costs are irrelevant to the capital budgeting decision. False 2. True or False Accrual basis income and cash basis income are often different amounts. 3. True or False Building are classified into one of 8 class lives and..

  A 1000 par value bond was issued 25 years ago at a 12

1 a 1000 par value bond was issued 25 years ago at a 12 coupon rate. it currently has 10 years to maturity. interest

  How much was the firm net income

The company had $16,500 of outstanding bonds that carry a 7.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was the firm's net income? The firm uses the same depreciation expense for tax and stockholder reporting pu..

  What must the rating of the bonds be for them to sell at par

c. What must the rating of the bonds be for them to sell at par?d. Suppose that when the bonds are issued, the price of each bond is $959.54. What is the likely rating of the bonds? Are they junk bonds?

  Analysis and interpretation of plc accounts

Assessment comprises the analysis and interpretation of PLC accounts including a 2,000 word report on the detailed analysis of the chosen business. A discussion of the capital structure of the company should be included. The company in question is..

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