User Account

All Pages

What is the merger npv under the stock offer

Assignment Help Business Management
Reference no: EM131640248

Suppose the instead of making a cash offer, Velcro Saddles considers offering POGO shareholders a 50% holding in Velcro Saddles.

a) What is the value of the stock in the merged company held by the original POGO shareholders?

b) What is the cost of the stock alternative?

c) What is the merger's NPV under the stock offer?

Velcro value = $20M

POGO value = $10M

Velcro estimates it can save $500,000 annually in perpetuity by merging in reduction of marketing and admin costs

Velcro is willing to pay $14M in cash for Pogo

Opportunity cost of capital = 8%

Reference no: EM131640248

Questions Cloud

What actions do you recommend rajah take : What actions do you recommend Rajah take about his concerns with respect to the new one-cent-in-change policy - Is there a need for ethics training
Compute ending inventory and cost of goods sold : Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods
Threatening to the current management of a firm : What are both tender offers and proxy contests threatening to the current management of a firm?
Explain similarities in your two solutions to same dilemma : Write an ethics paper about it, including all the following information. Explain the similarities and differences in your two solutions to the same dilemma.
What is the merger npv under the stock offer : Suppose the instead of making a cash offer, Velcro Saddles considers offering POGO shareholders a 50% holding in Velcro Saddles.
Federal law that lower the drinking age : Lowering the drinking age. A July 2007 Gallup Poll asked a random sample of 464 adults whether they would favor or oppose a federal law that would lower.
Different diagnostic tests used to assess for respiratory : different diagnostic tests used to assess for respiratory alterations
Investment in accounts receivables : a) What will be the firms typical value for its accounts receivable period? b) What is the average investment in accounts receivables if annual sales are $20M
Utilizing diverse teams within an organization : What are some advantages to utilizing diverse teams within an organization - overcome in order for a diverse team to be successful

Reviews

Write a Review

Business Management Questions & Answers

  Definition of corporate social responsibility

Create your own definition of corporate social responsibility (CSR). Who are the stakeholders in your current organization that should be involved in the planning and implementation of a CSR initiative?

  Connection between ethical leadership and persons values

supported by evidence in your text, defend whether you believe there is a connection between ethical leadership and a person's belief system and/or values.

  Is it tall or flat in terms of levels of leadership

Is it tall or flat in terms of levels of leadership? Is it a small system acting large through the use of outside partners or a large system acting small through task teams?

  Compare the prices and services of firms

Agree or disagree with the following scenario: Imagine that someone told you that today's global marketplace and the ability of potential customers to easily compare the prices and services of firms means that business owners must always compete on t..

  Illustrate what types of benefits packages are attractive

Illustrate what types of benefits packages are most attractive to workers at different stages in their career? At a minimum, Examine the needs of younger workers, middle-aged workers and workers nearing retirement.

  How does this technique compare with estimating

What are the advantages of inflating a project based on PERT estimating or incorporating risk? What are the disadvantages of inflating a project based on PERT estimating or incorporating risk?

  Provide vision mission and future accomplishments

Provide Vision, mission, future accomplishments. Trade environment (major exports, main trading partners, regional economic ?integration, tariff and trade barriers, government incentives for conducting business ?there) .

  How do stars form from the interstellar medium

How do stars form from the interstellar medium? What defines the main sequence stage of a star?

  Explain how has a new entrant in an established industry

Explain how has a new entrant in an established industry developed a cost advantage in such a short time? Be as comprehensive as you can in showing the different practices which JetBlue uses to achieve a cost advantage?

  Assign contingency reserves and determine how much reserve

Assign contingency reserves and determine how much reserve your team would evaluation for the whole project. Justify and describe your choices and estimates

  Create a competitive analysis of an ice cream shop

Identify each of the squares as to the price and number of flavors the ice cream shop would sell if this was their target segment of the market. Elaborate on the customer's purchasing characteristics for each square.

  Mission statement or core value on diversity

1. Please describe the company. It should include its major business, sales, achievementsand etc. Please use its annual report as a foundation and reference the related pages in your report. 2. Do they have a mission statement or core value on d..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd