Assignments 4 – Special Topics This assignment is for Ch21, Ch22, Ch23, and Ch24. I result mount this assignment by Dec. 11 2009 (Fri.) for posings 4 and 5, and Dec. 9 2009 (Wed.) for session 6. Ch. 21, Merger and Acquisition 8. Merger Gains and Costs. velcro consigns is contemplating the acquisition of Pogo ski Sticks Inc. The set of the both companies as separate entities are $20 one thousand thousand and $10 gazillion, respectively. velcro Saddle estimates that by combining the two companies, it will reduce trade and administrative costs by $500,000 per share in perpetuity. velcro Saddles is willing to pay $14 million cash for Pogo. The luck cost of capital is 8%. (LO2) a. What is the gain for merger? (Hints: bear upon to Slide #16. Solution to Q1. PV of every future economic gains.) 6.25 b. How a great deal gains go to the scrape? 4 c. How oftentimes gains go to the merchant bank under the cash commotion? 2.25 9. clove pink versus funds Offers. Suppose that instead of making a cash swirl as in Q8, Velcro Saddles considers offering Pogo shareholders tunes in Velcro Saddles. Shares outstanding for both companies are 1 million. (LO2) a. How much is the terms ratio between Velcro and Pogo? (Hints: Slide #17.) b.
Velcro Saddles decides to production new shares to acquire all shares of Pogo at a 1:3 conversion ratio. What is the value of the stock in the integrate company held by the original Pogo shareholders? c. How much gains go to the target? d. How much gains go to the acquirer under the stock offer? 11. Mergers and P/E ratios.! Castles in the Sand currently sells at a price-earnings multiple of 10. The theatre has 2 million shares outstanding, and sells at a price per share of $40. Firm founding has a P/E multiple of 8, has 1 million shares outstanding, and sells at a price per share of $20. (LO1) a. If Castles acquires the other firm by exchanging one of its shares for every two of the Firm Foundation, what will be the earnings per...If you want to get a entire essay, night club it on our website: BestEssayCheap.com
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