What is the value of the merger

Assignment Help Financial Management
Reference no: EM132014485

XYZ has a market value of $289449. ABC has a market value of $617676. ABC believes it can create $58473 of synergy if it acquires XYZ for $293011 in cash. Assume both firms are all-equity financed.

What is the value of ABC following the merger? (Round answer to 0 decimal places)

Reference no: EM132014485

Questions Cloud

Calculations in evaluating investments in long-term assets : We incorporate risk into our calculations in evaluating investments in long-term assets as.
The project incremental cash flows comprise of changes : The project’s incremental cash flows comprise of changes in operating cash flows, which one:
Preparing company statement of cash flows : In the course of preparing a company's statement of cash flows, What will the net effect of these items be in the statement of cash flows?
Calculate project profitability index : Suppose you calculate a Project’s profitability index to be 1.4, what does it mean?
What is the value of the merger : What is the value of ABC following the merger?
What is the value of the option to wait : What is the value of the option to wait?
What debt-equity ratio is needed for the firm : What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
What is the post-merger value per share : What is the post-merger value per share?
What will the total variable cost estimate be : If the company conducts a sensitivity analysis using a variable cost of $12, what will the total variable cost estimate be?

Reviews

Write a Review

Financial Management Questions & Answers

  Dividend payout ratio-what is sustainable rate of growth

The Green Giant has a 6 percent profit margin and a 65 percent dividend payout ratio. The total asset turnover is 1.5 and the equity multiplier is 1.6. What is the sustainable rate of growth?

  Contribute each year in order to achieve his retirement goal

how much money to save for retirement. What percentage of his income should he contribute each year in order to achieve his retirement goal?

  Changes in variable cost per unit projection

In percentage terms, what is the sensitivity of OCF to changes in the variable cost per unit projection?

  Future growth of the company based on the retention model

what is the expected future growth of the company based on the retention model?

  Will security prices increase and decrease

Will security prices increase, decrease, or stay the same following this announcement?

  Project is expected to create operating cash flows

A project is expected to create operating cash flows of $30,000 a year for three years. The initial cost of the fixed assets is $62,000. These assets will be worthless at the end of the project. An additional $5,000 of net working capital will be req..

  Changing original investment to dollar gain or loss

changing "original investment" to "dollar gain or loss"

  Avoid paying the property and mortgage insurance fee

What is it maximum you can probably borrow and avoid paying the property and mortgage insurance fee?

  What was dividend yield and the capital gains yield

Suppose a stock had an initial price of $60 per share, paid a dividend of $.60 per share during the year, and had an ending share price of $53. Compute the percentage total return. (Negative amount should be indicated by a minus sign. Do not round in..

  Residential mortgages

Imagine you have a pool of 30 year residential mortgages (FRMs, fully amortizing), WAC=4%, monthly payments. The pool balance at the beginning of the month is 285,634,760. The mortgages, on average, have already made three years of payments (i.e. the..

  Journal entries to record the exchange on the books

Larkspur Company exchanged equipment used in its manufacturing operations plus $4,320 in cash for similar equipment used in the operations of Cullumber Company. Prepare the journal entries to record the exchange on the books of both companies. Assume..

  What will be the new price using the duration model

What will be the new price using the duration model if interest rates increase to 8.5 percent?

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