Question: Some help and explanation will be great Question III: (20 Points) EV(Smm) 1000 800 Company B D E Initial Price $10.00 $9.00 $8.00 $7.00 $6.00



Some help and explanation will be great
Question III: (20 Points) EV(Smm) 1000 800 Company B D E Initial Price $10.00 $9.00 $8.00 $7.00 $6.00 600 400 200 There are 5 companies A-E with Enterprise Value (EV) given above. A11 5 companies have cash of $1000, zero debt, and 200 shares outstanding. Synergies equal 70% of the sum of the initial EVs of the companies in the merged entity. Team E plans to buy, the other 4 companies (A, B, C and D) in 4 deals that are described below. The cash consideration is financed with new debt. Consideration Per Selling Share Selling Company A B D Cash $ 10.00 $ 9.00 $ 8.00 $ 7.00 Newco Shares 0.25 0.25 0.25 0.25 a) If Company E closes these 4 deals, what will the MVBS of E look like and what are the merger prices to each of the 4 selling companies? Selling Company Merger Price MVBS Company E After 4 Deals $ /share A C= B $ /share L D= E = MVL = EV = MVA = $ share = D /share E= $ NE shares P= $ share b) Assume that after Company E closes all 4 deals described in part a), Company E determines its actual synergies are 90% of the sum of the initial EVs of the 5 companies. What will Company E's MVBS look like and what will be the implied total considerations for each of the 4 selling companies? Selling Company Merger Price MVBS Company E After 4 Deals A $ /share Newco B $ /share L D= $ /share A C= EV= MVA = E = D /share MVL - E= $ N= shares P=$ share Question III: (20 Points) EV(Smm) 1000 800 Company B D E Initial Price $10.00 $9.00 $8.00 $7.00 $6.00 600 400 200 There are 5 companies A-E with Enterprise Value (EV) given above. A11 5 companies have cash of $1000, zero debt, and 200 shares outstanding. Synergies equal 70% of the sum of the initial EVs of the companies in the merged entity. Team E plans to buy, the other 4 companies (A, B, C and D) in 4 deals that are described below. The cash consideration is financed with new debt. Consideration Per Selling Share Selling Company A B D Cash $ 10.00 $ 9.00 $ 8.00 $ 7.00 Newco Shares 0.25 0.25 0.25 0.25 a) If Company E closes these 4 deals, what will the MVBS of E look like and what are the merger prices to each of the 4 selling companies? Selling Company Merger Price MVBS Company E After 4 Deals $ /share A C= B $ /share L D= E = MVL = EV = MVA = $ share = D /share E= $ NE shares P= $ share b) Assume that after Company E closes all 4 deals described in part a), Company E determines its actual synergies are 90% of the sum of the initial EVs of the 5 companies. What will Company E's MVBS look like and what will be the implied total considerations for each of the 4 selling companies? Selling Company Merger Price MVBS Company E After 4 Deals A $ /share Newco B $ /share L D= $ /share A C= EV= MVA = E = D /share MVL - E= $ N= shares P=$ share
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