In the year 2019, Wells Fargo Securities analysts evaluate Liberty Property Trust's proposal for acquisition of $10
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Question:
a. Please compute the dollar value-added of this bolt-on acquisition for LRY investors according to Wells Fargo Securities analysts' forecasts. Conditional on LRY's total assets being fairly priced and no change in debt, what is the expected % stock price reaction to the approval of this asset purchase. ( You need to show your work for WACC and other steps)
b. Please compute the dollar value-added of this bolt-on acquisition if the yield on 10-year Treasuries increases by 40 basis points and LRY changes its capital structure to $250 million in total equity and $250 million in total debt. No change in CF forecasts are expected. (You need to show your work for WACC and other steps)
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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