Question

Acqura Co is thinking fo a merger with Targeta Co. Acqura share price is $25, Targeta...

Acqura Co is thinking fo a merger with Targeta Co. Acqura share price is $25, Targeta share price is $10 per share. Acqura has 1000 mill. and Targeta has 500 mill. shares outstanding. The total value of the merged firm is estimated as $32000 mill. The maximum amount of Acqura shares that Acqura shareholders should offer to Targeta shareholders is closest to (mill)

a) 500

b) 120

c) 55

d) 280

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Acqura Co is thinking fo a merger with Targeta Co. Acqura share price is $25, Targeta...
Acqura Co is thinking fo a merger with Targeta Co. Acqura share price is $25, Targeta share price is $10 per share. Acqura has 1000 mill. and Targeta has 500 mill. shares outstanding. The total value of the merged firm is estimated as $32000 mill. Q1. Acqura has offered to buy all Targeta shares for the cash amount of $8000 mill. This means the NPV of the merger for Acqura shareholders would be ($ mill.) a) 0 b) -1000 c)...
Gobi Desserts is bidding to take over Universal Puddings. Gobi has 3,500 shares outstanding, selling at...
Gobi Desserts is bidding to take over Universal Puddings. Gobi has 3,500 shares outstanding, selling at $55 per share. Universal has 2,500 shares outstanding, selling at $22.50 a share. Gobi estimates the economic gain from the merger to be $22,500. 1. If Universal can be acquired for $25 a share, what is the NPV of the merger to Gobi? 2. What will Gobi sell for when the market learns that it plans to acquire Universal for $25 a share? 3....
. Light Years Savings Association has just received an offer to merge from Courthouse County Bank....
. Light Years Savings Association has just received an offer to merge from Courthouse County Bank. Light Years’ stock is currently selling for $70 per share. The shareholders of Courthouse County agree to pay Light Years’ stockholders a bonus of $10 per share. a. What is the merger premium in this case? b. If Courthouse County's shares are currently trading for $85 per share, what is the exchange ratio between the equity shares of the two institutions? c. Suppose that...
Firm A is acquiring Firm B. Firm A’s share price is $12 and Firm B's share...
Firm A is acquiring Firm B. Firm A’s share price is $12 and Firm B's share price is $4. Both firms have 1 million shares outstanding. Firm A expects a discounted synergistic value of $2 million from the merger. If Firm A pays $5 million cash to Firm B's shareholders, what is the NPV of the acquisition?
A Corporation has been in merger talks with B Company. After the merger, B will become...
A Corporation has been in merger talks with B Company. After the merger, B will become a division of A. Jack, the financial officer at A, has been instrumental in the negotiations. Both companies believe a merger will result in significant synergies due to economies of scale in manufacturing and marketing, as well as savings in general and administrative expenses. Stocks in A currently sell for $94 per share, and the company has 11 million shares of stock outstanding. The...
Luther Industries currently has 100 million shares outstanding at a price of $25 per share. The...
Luther Industries currently has 100 million shares outstanding at a price of $25 per share. The company would like to raise money and has announced a rights issue. Every existing shareholder will be sent one right per share that he or she owns. The company plans to require twenty rights to purchase one share at a price of $20 per share. The amount of money that Luther will raise through its rights offering is closest to Select one: A. $100...
John’s shop has 700 shares outstanding at a market price per share of $17. Sam’s has...
John’s shop has 700 shares outstanding at a market price per share of $17. Sam’s has 300 shares outstanding at a market price of $35 a share. Neither firm has any debt. Sam’s is acquiring John’s for $27,000 in cash. What is the merger premium per share? Red’s, Inc. and Bed’s, Inc. are all-equity firms. Red’s has 3,700 shares outstanding at a market price of $14 a share. Bed’s has 500 shares outstanding at a price of $18 a share....
Firm A has a value of $500 million and Firm B has a value of $300...
Firm A has a value of $500 million and Firm B has a value of $300 million. Firm A has 1000 shares outstanding, and Firm B has 1000 shares outstanding. Suppose that the merger would increase cash flows of the combined firm by $5 million in perpetuity. Assuming the cost of capital for the new firm is 10%. Suppose that instead of paying cash, Firm A acquires B by offering two (new) shares of A for every three shares of...
Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm...
Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B Firm T Shares Outstanding 8,700 3,600 Price per Share $47 $19 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $16,700. Suppose Firm B agrees to a merger by an exchange of stock. If B offers one of its shares for every 2 of T's shares....
Rockwood Industries has 100 million shares outstanding, a current share price of $25, and no debt....
Rockwood Industries has 100 million shares outstanding, a current share price of $25, and no debt. Rockwood's management believes that the shares are under-priced, and that the true value is $30 per share. Rockwood plans to pay $250 million in cash to its shareholders by repurchasing shares. Management expects that very soon new information will come out that will cause investors to revise their opinion of the firm and agree with Rockwood's assessment of the firm's true value. 40. Assume...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT