A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: Total earnings Number of shares of stock outstanding Earnings per share Price-earnings ratio (P/E) Market price per share Minnie Mickey Corporation Corporation $2,025,000 $4,050,000 270,000 1,080,000 $7.50 10X $75 $4 20X $75 a. Assume a 100 percent premium will be paid and there is a 32 percent synergistic benefit to total earnings from the merger. What is the change in Mickey Corporation's earnings if it merges with Minnie Corporation? (Round the final answer to 2 decimal places.) Change in earnings per share post merger b. Will the postmerger earnings go up or down? $1 Up Down A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: Total earnings Number of shares of stock outstanding Earnings per share Price-earnings ratio (P/E) Market price per share Minnie Mickey Corporation Corporation $2,025,000 $4,050,000 270,000 1,080,000 $7.50 10X $75 $4 20X $75 a. Assume a 100 percent premium will be paid and there is a 32 percent synergistic benefit to total earnings from the merger. What is the change in Mickey Corporation's earnings if it merges with Minnie Corporation? (Round the final answer to 2 decimal places.) Change in earnings per share post merger b. Will the postmerger earnings go up or down? $1 Up Down
Expert Answer:
Answer rating: 100% (QA)
The information available is tabulated below Minnie Corporation 2025000 Particulars Toal Ea... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
Students also viewed these accounting questions
-
A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: a. On a share-for-share exchange basis, what will the...
-
In the case of the Minnie and Mickey merger described in the previous problem, assume a 100 percent premium will be paid and there is a 25 percent synergistic benefit to total earnings from the...
-
Assume the following financial data for the Wolf Corporation and Lamb Enterprises. a. If all the shares of the Wolf Corporation are exchanged for shares of the Lamb Enterprises on a share-for-share...
-
On January 1, 2012, Wilmes Floral supplies borrowed $2,413 from Bower Financial Services. Wilmes Floral Supplies gave Bower a $2,500 note with a maturity date of December 31, 2013. The note specified...
-
You are in a job interview and your possible employer asks you to describe the differences between the flexible and the static budget and to explain which you would recommend for a small business and...
-
For nongovernmental NFP, how are unconditional promises to give with collections due in the next period accounted for?
-
Tristate Recreation Park (TRP) finances operations with both bonds and stock. Suppose TRP issued \(\$ 200,000\) of 10 -year, \(6 \%\) bonds payable under various market conditions. Match each market...
-
Refer to Problems 17.1 and 17.2 for information about the revenue and expenditure cycle activities for Joes ice-cream shop in order to draw an integrated REA diagram of both cycles.
-
What is the difference between future value and present value? What data do you need to future value or present value calculation?What are various ways to calculate the time value of money in...
-
The gecko is a reptile with an amazing ability to climb smooth surfaces, including glass. Recent discoveries indicate that geckos stick to smooth surfaces via van der Waals interactions between...
-
Explain with an example how organizations plan and coordinate demand and supply in a supply chain.
-
Analyse the impact of individual differences in statistical numeracy on consumer decision-making, using recent examples from thebusiness sector. Discuss the resulting implications and suggest...
-
Analyze the impact of the COVID-19 pandemic on Heineken's supply chain and recommend strategies to mitigate its effects.
-
Provide an analysis of the impact of innovation on the growth and competitive advantage of an organization. In your analysis, do the following: Describe the organization you chose and explain how...
-
Summarize: The challenge of sustainability will impact the hospital health care setting significantly. Hospitals are high energy consumers due to their 24/7 operation. To become sustainable, they...
-
A diver of mass 6 5 kg takes off from the 1 0 m platform from a standing position by jumping upwards with a ( near ) vertical speed of 2 . 0 ms - 1 . a ) Calculate i ) the time taken to reach the...
-
Your accountant tells you that if you can continue to earn the current interest rate on your balance of $750 for the next three years, you will have $998.25 in your account. If your accountant is...
-
White Bolder Investments (WBI) You are an intern working for WBI, a large investment advisory services in Sydney. Among other regular customers, WBI has been providing advisory services for Jumbo...
-
Digitex Inc. had sales of 6,000 units in March. A 50 percent increase is expected in April. The company will maintain 5 percent of expected unit sales for April in ending inventory . Beginning...
-
Friedman Steel Company will pay a dividend of $1.50 per share in the next 12 months (D 1 ). The required rate of return (K e ) is 10 percent and the constant growth rate is 5 percent. a. Compute P 0...
-
In the second year, Fisk Corporation finds that it can reduce ordering costs to $2 per order but that carrying costs stay the same at $1.20. Also, volume remains at 75,000 units. Recompute a, b, c,...
-
Assume Knowlton Holdings Ltd. completed these long-term non-strategic investment transactions during 2020 : 1. Journalize Knowlton's investment transactions assuming the company reports any changes...
-
Suppose on February 1, 2020, General Motors paid \(\$ 41\) million for a \(40 \%\) investment in ABC Ltd., an auto parts manufacturer. Assume \(A B C\) earned net income of \(\$ 6\) million and paid...
-
Return to exercise SB-7, the Prudential Bache (PB) investment in CitiCorp bonds. Journalize the following on PB's books: a. Purchase of the bond investment on January 2, 2020. PB expects to hold the...
Study smarter with the SolutionInn App