Question: Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the minimum price per share Firm A would pay

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the minimum price per share Firm A would pay to acquire Firm B in a tender offer?

Firm A:

Market value of debt: 1 million

Market value of equity: 6 million

Number of shares: 0.1 million

Estimated total firm value based on value-based management model: 7.2 million

Firm B:

Market value of debit: 4 million

Market value of equity: 6 million

Number of shares: 0.4

Estimated total firm value based on value-based management model: 12.8 million

use 6 decimal places

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
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!

Q:

Wangs Concrete Service notes that the number of jobs each month follows the following distribution: 10 with probability 0.15, 11 with probability 0. 20, 12 with probability 0.20, 13 with probability...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the maximum price per share Firm A would pay to acquire Firm B in a tender offer? Firm A: Market value of...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the maximum price per share Firm A would pay to acquire Firm B in a tender offer? Firm A: Market value of...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the maximum price per share Firm A would pay to acquire Firm B in a tender offer? Firm A: Market value of...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to...

Q:

Please provide formulas, i need to input into excel. Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio A negotiates a merger with...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to...

Q:

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to...

Q:

Firm A is considering a merger/acqusition with Firm B. Based on the following data, what is the maximum price per share Firm A would pay to acquire Firm B in a tender offer? Firm A: Market value of...

Q:

Please explain in excel formula. Firm A is considering a mergerlacquisition with Firm B. Based on the following data, what is the maximum price per st Firm A would pay to acquire Firm B in a tender...

Q:

What are managements objectives related to payroll?

Q:

Data for the investment centers for Paige Company are given in BE24-9.The centers expect the following changes in the next year: (I) increase sales 15%; (II) decrease costs $200,000; (III) decrease...

Q:

Using the November month and reconciliation Provided for prepaid expenses and the preliminary General ledger activity for December record all 1 0 adjusting entries needed for December clothes and 2 ....

Q:

1. Companies that invest in other companies often prefer using the equity method instead of consolidating their investments, because consolidating would a. reduce their stockholders' equity. b....

Q:

Outside consultants are paid $200 in cash, and registration fees to issue PR's new stock are $400. Total acquisition cost reported by PR (the debit to Investment on PR's books) is a. $50,000 b....

Q:

Refer to the Arctic Springs Bottling Department Data Set and your answer to S5-18. Complete Steps 3 and 4 of the process costing procedure: Summarize total costs to account for and then compute the...

Q:

Refer to the Crystal Springs Filtration Department Data Set and your answer to S5- 17. Crystal Springs Data Set: Crystal Springs produces premium bottled water. CrystalSprings purchases artesian...

Q:

Why have automated handling systems failed to meet their expected potential?

Q:

What is the primary goal of individualized marketing? To market products with broad appeal to the entire market. To customize products to fit individual needs. To tailor goods and services to suit...

Q:

=+ Besides decision makers, who else would have an interest in the evaluation?

Q:

=+ Who will receive the final evaluation, and what will they do with the information?

Q:

=+ What standards of accuracy and reliability are needed for this information?