Question: Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $100 million (no excess cash). Small Corp currently has 5 million shares outstanding with a share price of $30 and total outstanding debt of $50 million (no excess cash). Big Corp plans to conduct a blended offer. Specifically, it plans to offer $15 in cash and for 0.4 new shares in Big Corp for each share in Small Corp. Big Corp will assume all outstanding debt of Small Corp and will finance the cash part of the offer by taking out a new bank loan. Synergies from the transaction are expected to Round your result to two decimals (do not include the $-symbol in be $80 million. Calculate the new share price of Big Corp after the acquisition ( P your answer). Big + Small

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Solution To calculate the new share price of Big Corp after the acquisition we can follow these step... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

(2) Draw an NFA for L2. L2ab+(aaa), = {a, b}

Last Sale Net Bid Ask Open Int Puts Last Sale Net bid Ask Vol Open Int 16Aug 155.00(1619H155-E) 6.45 0.75 6.95 7.25 9 16Aug 155.00(1619T155-E) 1.18 (0.75) 1.17 1.25 61 4505 16Aug 166.00(1619H160-E)...

The J. Miles Corp. has 25 million shares outstanding with a share price of $20 per share. Miles also has outstanding zero-coupon debt with a 5-year maturity, a face value of $900 million, and a yield...

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $100 million (no excess cash). Small...

Review the PC 1026 mental health evaluation provided in the supplemental materials. Given the criteria set forth in John Blume's article, critique the evaluation provided. In your estimation, is the...

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $100 million (no excess cash). Small...

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $ 100 million (no excess cash). Small...

Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $100 million (no excess cash). Small...

Answer the following questions: Why is ethical behaviour important in financial reporting? What are the common excuses people would give to justify ethical dilemmas? What are the roles and...

What should come in place of the question mark '?' in the following question? (?)3 x 8 = 1323 {(9.261 7)} %3D 1. 2. 25 3. 125 4. 0.5 2.5 LO 5.

In the PowerPoint presentation, use this marshals, course, readings and supplement readings to define and describe marketing and marketing strategies, as well as those related to RND and production...

1 2 Milestone Three - Statement of Cost of Goods Sold 3 4 6 Beginning Work in Process Inventory 7 Direct Materials: 8 9 11 12 A Materials: Beginning Add: Purchases for month of January 14 15 16...

Integrative Case 4.1. Profitability and Risk Analysis of Walmart Stores Part A Walmart Stores (Walmart) is the worlds largest retailer. It employs an everyday low price strategy and operates stores...

In evaluating the performance ( returns ) of a U . S . Large Cap Stock Mutual Fund, the index / benchmark that would be least appropriate for comparisons sake would be _ _ _ _ _ . Group of answer...

Problem 10-7A (Algo) Natural resources LO P3 [The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Company pays $7,852,800 for land...

Using a Residual Income Model (RIM), where residual income grows at rate 8 for n=6 years and rate 8 thereafter, compute the intrinsic value per share for Acme Inc. given the following information...

calculate the Cohen's d for the DIFFERENCE in the two sample means

Using the analytical framework, indicate the effect of each of the three independent sets of transactions described next. (1) a. January 15, 2014: Purchased marketable equity securities for $100,000....

The 3M Company is a global diversified technology company active in the following product markets: consumer and office; display and graphics; electronics and communications; health care; industrial;...

Rock of Ages, Inc., a large North American integrated granite quarrier, manufacturer, and retailer of finished granite memorials, reported a net loss for 2004 of $3.2 million. In 2004, the firm...

identify how personality can be measured,

The chapter begins with the story of Jason coming to bat in a pressure situation. Given what you have learned, what can Jason do to manage his anxiety and play well? How could you help him view his...

T F A widely used treatment for heroin addiction involves substituting one addictive drug for another. (p. 320) ????1..1..1 ???? What drawbacks, if any, do you see in using therapeutic drugs to treat...