Company A considers acquiring company B. Shares of the company A trade at $30 and there are

Fantastic news! We've Found the answer you've been seeking!

Question:

Company A considers acquiring company B. Shares of the company A trade at $30 and there are 5,000 of A shares outstanding. Company B has 200 shares outstanding worth $100 each. If A acquires B, then the resulting synergy will amount to $10,000.

Suppose A offers to exchange every B's share for $130 in cash. What will be the share price of the merged company?

Posted Date: May 19, 2024 09:12 AM

See More Questions

Great ride (GR) is in the business of manufacturing and selling high-end vehicles. GR signs a deal with the CEO of a consulting firm for a luxury SUV. You are the long-time Controller for GreatRide...
In a voice communication system with 50 lines, the random variable is the number of lines in use at a particular time.
In a set of experiments on a hypothetical one-electron atom, you measure the wavelengths of the photons emitted from transitions ending in the ground state (n = I), as shown in the energy level...
Why is projecting cash requirements so critical in a growing firm?
Philip Musa can build either a large video rental section or a small one in his Birmingham drugstore. He can also gather additional information or simply do nothing. If he gathers additional...
Consider the given function r: {I} = {x2}2 +4. {a} Determine whether the graph of the parabola opens upward or downward. {In} Identify the vertex. {ch Determine the x-interceptfs}. {d} Determine the...
VECCMs (vitamin enhanced chocolate coated marshmallows) failed to gain distribution in most health food stores, but Paul was determined to pursue his dream of marketing a good-tasting snack food that...
Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the West, Central, and East regions. Each of these regions...
Reggie has just taken over management of a family business. He wants to make sure that it makes financial sense to keep the business going. He could sell the building today for $480,000. Keeping the...
West Company is a print shop that produces jobs to customer specifications. During January, Job #3051 was worked on and the following information is available: Direct material used $2,500 Direct...
Mr. Aranjuez bought a flat screen TV on credit. They ask for a down payment of $5,300.00 and you have a balance of $21,200.00 left to cover with 12 payments of $2,200.00 each. What is the annual...
Which perpetuity has a higher rate of return? explain why. Perpetuity A: $10,000 perpetuity that pays $500 per year Perpetuity B: $40,000 perpetuity that pays $1,500 per year
ABC hedge fund is a major market maker in certain securities and is also a proprietary trader in its distressed debt business. What is the difference between the two roles? Why can ABC hedge fund...
Ellen Taylor is thinking of buying a home for $111,000. A potential lender advertises an 80%, thirty-year simple interest amortized loan at 10% interest, with an APR of 11.57%. Use the APR to...
I frequently use NY Times and CNN and am aware of Fox News but I never use it. I visit these sites, NY Times and CNN, a few times a week whenever I have to research something or see something on...
Continuation of E9-32, E9-33, E9-34: memo (Learning Objective 5)} Use your results from E9-32, E9-33, and E9-34 to write a memo to Deer Valley's Director of Finance Jim Madsen recommending whether...
Calculate NPV with and without residual value (Learning Objective 4) Refer to the Deer Valley Expansion Data Set. 1. What is the project's NPV? Is the investment attractive? Why or why not? 2. Assume...
Calculate IRR with no residual value (Learning Objective 4) Refer to the Deer Valley Expansion Data Set. Assume that the expansion has no residual value. What is the project's IRR? Is the investment...

Company A considers acquiring company B. Shares of the company A trade at $30 and there are

Question:

Expert Answer:

Students also viewed these finance questions