Consider the following financial information for a bidder and a target.
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Question:
Consider the following financial information for a bidder and a target.
Bidder Co Target Co
Shares on Issue - millions 650 600
Share price (trading price) $ 7.80 $2.00
The Bidder makes an offer at a 30% takeover premium to the target's trading price and will finance the transaction with 50% debt. Based on this information, and ignoring transaction costs and synergies, how many shares on issue will the merged entity have?
Related Book For
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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