Orion plc is determined to report earnings per share of 267p. It therefore acquires Mintaka plc....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Orion plc is determined to report earnings per share of 267p. It therefore acquires Mintaka plc. There are no gains associated with the acquisition. In exchange for Mintaka's shares, Orion issues just enough of its own shares to ensure its 267p earnings per share objective, Please find the following information: Orion Mintaka £2.50 £25 Earnings per Share Price per Share Price-Earnings Ratio Number of Shares £2.00 £40 20 10 Earnings Market Value 100,000 £200,000 £4,000,000 £5,000,000 200,000 £500,000 Required: a) How many shares in the combined firm have to be offered for each share in Mintaka? (5 marks) b) Derive the earnings per share, price per share, price-earnings ratio, earnings, and market value associated with the combined firm. (5 marks) c) What is the cost of the acquisition to Orion? (5 marks) d) What is the change in the market value of Orion's shares that were outstanding before the acquisition? (5 marks) [Total: 20 Marks] Orion plc is determined to report earnings per share of 267p. It therefore acquires Mintaka plc. There are no gains associated with the acquisition. In exchange for Mintaka's shares, Orion issues just enough of its own shares to ensure its 267p earnings per share objective, Please find the following information: Orion Mintaka £2.50 £25 Earnings per Share Price per Share Price-Earnings Ratio Number of Shares £2.00 £40 20 10 Earnings Market Value 100,000 £200,000 £4,000,000 £5,000,000 200,000 £500,000 Required: a) How many shares in the combined firm have to be offered for each share in Mintaka? (5 marks) b) Derive the earnings per share, price per share, price-earnings ratio, earnings, and market value associated with the combined firm. (5 marks) c) What is the cost of the acquisition to Orion? (5 marks) d) What is the change in the market value of Orion's shares that were outstanding before the acquisition? (5 marks) [Total: 20 Marks]
Expert Answer:
Answer rating: 100% (QA)
a Combined firm earnings Earnings of Orion Plc Earnings of Mintaka Plc 200000 50000... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
In 2011, Pringle Company reported earnings per share of $9.50 when its stock was selling for $228. In 2012, its earnings increased by 13 percent. If all other relationships remain constant, what is...
-
In 2009, Drago Company reported earnings per share of $9.50 when its stock was selling for $228. In 2010, its earnings increased by 13 percent. If all other relationships remain constant, what is the...
-
In 2014, Pringle Company reported earnings per share of $9.50 when its stock was selling for $228. In 2015, its earnings increased by 13 percent. If all other relationships remain constant, what is...
-
Use the figure to make the lists in Exercises 8586. List the slopes m 1 , m 2 , m 3 , and m 4 in order of decreasing size. y y = mx + b y = mx + b X - y = m3x + b3 y = m4x + b4
-
On August 1, 2014, Delanie Tugut began a tour company in the Northwest Territories called Tugut Arctic Tours. The following occurred during the first month of operations: Aug. 1 Purchased office...
-
Suppose \(X_{n} \sim \chi_{n}^{2}\), the chi-square with \(n\) degrees of freedom. Show that \[\frac{1}{\sqrt{2 n}}\left(X_{n}-n ight) ightarrow_{d} N(0,1)\]
-
The velocity potential for a certain inviscid, incompressible flow field is given by the equation \[ \phi=2 x^{2} y-\left(\frac{2}{3} ight) y^{3} \] where \(\phi\) has the units of \(\mathrm{m}^{2} /...
-
The shareholders' equity section of Superior Corporations balance sheet as of December 31, 2015, is as follows: The following events occurred during 2016: Jan. 5 10,000 shares of authorized and...
-
1. (25 marks) The financial year end for a large machine parts manufacturer will end in a week's time. The manager, Rebecca who is in charge of 10 salespersons is overwhelmed with work as is usual...
-
Copy Fast Services was opened by Jarenz on January 1, 2008 with a cash investment of P 10,000. Additional transactions for the month are as follows: Jan 245678 6 7 8 9 14 15 19 20 25 6456 33333 30 31...
-
The following describes the Inventory control system for Aramex Company . The company has a centralized computer system with terminals located in various departments. The terminals are networked to a...
-
How do neoliberal economic policies contribute to social conflict by prioritizing market interests over the welfare of marginalized groups, thereby exacerbating socioeconomic inequalities ?
-
What role does hegemony play in perpetuating social conflict, particularly within marginalized communities ? Explain
-
What impact does structural violence, as conceptualized by peace researchers, have on the perpetuation of social conflict within disenfranchised communities ?
-
Globalization tends to provide net benefits to those nations that become active participants in the global economy. Why have several nations, such as Kenya, Brazil, India, and Zimbabwe, experienced...
-
How does globalization contribute to the spread of cultural and ideological hegemony, and what are the implications for the preservation of indigenous knowledge and non-Western value systems ?
-
Humber Bakery needs to decide how many units of its new Rexdough bread (nicknamed Rex) to bake at the start of each day.Because the bakery prides itself on being the maker of the freshest premium...
-
Data 9.2 on page 540 introduces the dataset Cereal, which includes information on the number of grams of fiber in a serving for 30 different breakfast cereals. The cereals come from three different...
-
Computing and Interpreting the Receivables Turnover Ratio A recent annual report for FedEx contained the following data: Required: 1. Determine the receivables turnover ratio and average days sales...
-
Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Total Asset Turnover Ratio as a Financial Analyst Massa Company, which has been operating for three years, provides...
-
What are the three major classifications on a statement of cash flows?
-
Outline briefly the development of corporate accountability over the past 160 years.
-
List reasons which help to explain why the detection of fraud and error lost its prominence as the primary audit objective during the 1920-1960s period.
-
To determine the effect of height on power generated in a hydroelectric power plant, the following observations were made:. Use the level of significance \(\alpha=0.05\) to test whether the height of...
Study smarter with the SolutionInn App