1. What's the value of Gold entreprise to Silver enterprises? 

2. what would silver enterprises gain be from this acquisition? 

3. if Silver Enterprises were to offer $20 in cash for each share of gold entreprise, what would be npv of acquisition? 

4. what's the most silver enterprises should be willing to pay in cash per share for the stock of gold enterprises. if silver entreprise were to offer 225000 of its shares in exchange for outstanding stock of gold, NPV?

 

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Silver Enterprises is considering making an offer to purchase Gold Enterprises. Silver's Vice President of finance has collected the following information: Dividends Silver Enterprises Gold Enterprises $1,050,000 $470,000 $4,200,000 $960,000 Earnings Price-earnings ratio (P/E) 14.5 Shares Outstanding 1,500,000 10 750,000 Silver Enterprises also knows that securities analysts expect the earnings and dividends of Gold Enterprises to grow at a constant rate of 4% each year. Silver Enterprises management believes that the acquisition of Gold Enterprises will provide the firm with some economies of scale that will increase this growth rate to 6% per year. Silver Enterprises is considering making an offer to purchase Gold Enterprises. Silver's Vice President of finance has collected the following information: Dividends Silver Enterprises Gold Enterprises $1,050,000 $470,000 $4,200,000 $960,000 Earnings Price-earnings ratio (P/E) 14.5 Shares Outstanding 1,500,000 10 750,000 Silver Enterprises also knows that securities analysts expect the earnings and dividends of Gold Enterprises to grow at a constant rate of 4% each year. Silver Enterprises management believes that the acquisition of Gold Enterprises will provide the firm with some economies of scale that will increase this growth rate to 6% per year.

Answer rating: 100% (QA)

1 Value of Gold Enterprises to Silver Enterprises Value Earnings PE ratio Value 960000 145 Value ... View the full answer