Scenario and calculate the maximum offer

Assignment Help Finance Basics
Reference no: EM132097254

The LTE Inc, a financial advisory firm, is putting together the deal book and running the valuation analysis for various private clients. Assume that you are the "rock-star analyst" in the firm and asked to lead the valuation team to finalize the offer. A 15% control premium and a 30% illiquidity discount are justified for all the situations. Also, assume that there are 100 million shares in all the target companies.

What adjustments should be applied in each scenario and calculate the maximum offer.

Deal A: A private equity (PE) firm, financial buyer, acquires a privately held company with dispersed shareholders. The intrinsic value of common equity based on the Relative Valuation-public comparables model is estimated to be $90 million. the maximum offer to existing shareholders?

Deal C: A strategic buyer acquires a privately held company with a majority shareholder, who owns 55% of the shares of this company. The intrinsic value of common equity based on the APV model is estimated to be $90 million and the present value of synergies is estimated to be $10 million. the maximum offer to the controlling shareholder? To the minority shareholders?

Reference no: EM132097254

Questions Cloud

Compute the percentage of the firm : Compute the percentage of the firm that is financed by debt provided that the firms assets of $9 million are financed by $5 million
What is the wacc : Equity holders require a 6% return and preferred stock holders require a 3.4% return. The current tax rate that applies to the firm is 30%. What is the WACC?
Compute the after tax cost of debt : The firms current yield to maturity on debt is 6% and the debt pays a 4% coupon. current tax rate equal 41.4%. Compute the after tax cost of debt.
Find the size of the payments : He expects to receive 100 equal monthly payments from the investment; the first payment is expected in one year. Find the size of the payments.
Scenario and calculate the maximum offer : What adjustments should be applied in each scenario and calculate the maximum offer.
Long-term debt outstanding at the start of the year : What is the formula to calculate the required external financing over the next year?
At what price would these bonds sell in the marketplace : At what price would these bonds sell in the marketplace? How many bonds would the firm have to issue to raise $1 million?
What are the weight of equity-weight of debt : What are the weight of equity, weight of debt, cost of equity, after tax cost of debt, WACC.
Income statement relate to the health of the company : How does the balance sheet, income statement relate to the health of the company? What does a trend analysis of statements of cash flows tell?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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