If a firm wishes to achieve immediate appreciation in earnings per share as a result of a

Question:

If a firm wishes to achieve immediate appreciation in earnings per share as a result of a merger, how can this be best accomplished in terms of exchange variables? What is a possible drawback to this approach in terms of long-range considerations?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations of Financial Management

ISBN: 978-1259194078

15th edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

See More Books

Question Posted: Oct 14, 2014 07:51 AM

See More Questions

A firm wishes to estimate graphically the betas for two assets, A and B. It has gathered the return data shown in the following table for the market portfolio and for both assets over the last 10...
What is bottom-up branding and how can this be a helpful concept for a firm?
A firm wishes to know the average weekly expenditure on food by households to within 2, with 95% confidence. If the variance of food expenditure is thought to be about 400, what sample size does the...
The emergency room of the community hospital in Farmburg has one receptionist, one doctor, and one nurse. The emergency room opens at time zero, and patients begin to arrive some time later. Patients...
Show that if E is a nonempty bounded subset of Z, then inf E exists and belongs to E.
In Exercises 116, solve and check each linear equation. 3x + 5 = 2x + 13
The cost of college. The part of the CPI that measures the cost of college tuition (198284 = 100) was 552.9 in September 2007. The overall CPI was 208.5 that month. (a) Explain exactly what the index...
Roscoe contributes a personal use asset with an adjusted basis of $15,000 and a fair market value of $28,000 on the contribution date. Determine if any gain or loss is recognized and the basis under...
1. What are the pros and cons of using options to compensate employees? 2. Why would a company choose to use convertible bonds for financing rather than a straight bond?
Franchise taxes are levied on businesses that gain a franchise right of doing business in a jurisdictions territory. The data in Table 9.1 are franchise tax revenues in the city of Sunbelt, Florida,...
What is synergy? What might cause this result? Is there a tendency for management to over- or underestimate the potential synergistic benefits of a merger?
It is possible for the postmerger P/E ratio to move in a direction opposite to that of the immediate postmerger earnings per share. Explain why this could happen.
You estimate that the price elasticity of demand for clinic visits is 0.25. You anticipate that a major insurer will increase the copayment from $20 to $25. This insurer covers 40,000 of your...
Beginning with Eq. (11.16), prove that Data from Eq. 11.16 Data from Eq. 11.21 where we have defined D8 = - 3 2 F = FiFi T = F + F + F Y = F8. 3 Show that this leads to Eq. (11.21) with the...
Consider the light bulb that is the object in Figure 33.28. If you move the bulb to the left, does the image shift left, shift right, or stay in the same place? Data from Figure 33.28 (a) The three...
Two models of light emitted from a light bulb are illustrated in Figure P33.5. (a) Describe the difference in the behavior of light in each model. (b) Describe an experiment that can determine which...
Parallel red and green laser rays are incident on a glass slab as shown in Figure P33.24. Sketch the rays as they pass through the slab and after they have entered the air to the right of the slab....
Consider the following five operations: constructing a luxury cruise ship, operating a casual dining restaurant, staging a professional sports match, manufacturing a patented drug, and rescuing...
Which of the following is NOT an example of an internal failure cost? a. Scrap b. Reworking of products c. Supplier scrap and rework d. Returned product
(a) As Section 17.3 discusses, high-frequency sound waves exhibit less diffraction than low-frequency sound waves do. However, even high-frequency sound waves exhibit much more diffraction under...
Assume management predicts that the selling price per unit and variable cost per unit will be the same in 2024 as in 2022. Fixed manufacturing costs and marketing, distribution and customer-service...
The Tahitian Lottery has promised an annual stipend of $75,000, forever, and permanent residency on Tahiti. Assuming interest rates of 6 percent, how much must the Tahitian authorities set aside...
This problem compares the aftertax income on a $35,000 investment for the following two investors resident in Ontario and two possible investments. Table 2-13 will be of assistance. Stanley Truck...
The Belton Corporation has $5 million in earnings after taxes and 1 million shares outstanding. The stock trades at a P/E of 10. The firm has $4 million in excess cash. a. Compute the current price...
Which of the following concerning short-term financing methods is NOT CORRECT? Short-term bank loans typically do not require assets as collateral. Firms generally have little control over the level...
Kingbird Corporation is preparing its December 31, 2017, balance sheet. The following items may be reported as either a current or long-term liability. 1. On December 15, 2017, Kingbird declared a...
BE13.2 (LO 1), AP An inexperienced accountant for Silva Corporation showed the following in the income statement: net income \$337,500 and unrealized gain on availablefor-sale securities (before...

If a firm wishes to achieve immediate appreciation in earnings per share as a result of a

Question:

Step by Step Answer:

The firm can achieve this by acquiring a company at a ...View the full answer

Foundations of Financial Management

Students also viewed these Corporate Finance questions