If the valuation using comparables indicates the acquisition price is reasonable compared to other firms in the

Question:

If the valuation using comparables indicates the acquisition price is reasonable compared to other firms in the industry, does it establish that the acquisition is a good investment opportunity?

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

Step by Step Answer:

Related Book For book-img-for-question

Corporate Finance

ISBN: 9780132992473

3rd Edition

Authors: Jonathan Berk, Peter DeMarzo

See More Books

Question Posted: Mar 15, 2024 01:00 AM

See More Questions

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
3 Financial ratio analysis for Time Warner. a. Find financial ratios for Time Warner for the last 1-3 years and its major competitor for the last year in the Internet. o Present the ratios as a...
How much does it cost to build a school? As a rule, between $280 and $310 per square foot. Ash Notaney, however, told officials in Santa Ana, California, that he could build one for $200$210 per...
Alpha Mann Ltd makes and sells computer carry bags. Bill Blake, the company accountant, is responsible for preparing the company's annual budget. In compiling the budget data for next year, Blake has...
On a planet far, far away, an astronaut picks up a rock. The rock has a mass of 5.00 kg, and on this particular planet its weight is 40.0 N. If the astronaut exerts an upward force of 46.2 N on the...
There is a one-time cash bonus of $1,182,700 for management. What do you think?
Why do project teams create time-phased budgets? What are their principal strengths?
The stockholders equity for Dairy Place Drive-Ins (DP) on December 31, 2012, follows: On April 16, 2013, the market price of DP common stock was $20 per share. Assume DP distributed an 18% stock...
Fingen's 19-year, $1000 par value bonds pay 11 percent interest annually. The market price of the bonds is $1060 and the market's required yield to maturity on a comparable-risk bond is 9 percent....
What are the different operational improvements KKP plans to make?
What is the purpose of the valuation using comparables?
Following are the non-strategic investment transactions of Corona Inc.: Required 1. For each of the bond investments, prepare an amortization schedule showing only 2020 and 2021. 2. Prepare the...
Pacifico Company, a U . S . - based importer of beer and wine, purchased 1 , 7 0 0 cases of Oktoberfest - style beer from a German supplier for 4 5 9 , 0 0 0 euros. Relevant U . S . dollar exchange...
Consider each of the following scenarios and identify a behavioral intervention to address each issue in family work. A teenager not complying with curfew. One member of the couple not picking up...
Sandy Crane Hospital expanded its maternity ward to add patient rooms for extended hospital stays. They negotiated a 15-year loan with monthly payments and a large sum of $250,000 due at the end of...
2 (39 marks) R QUESTION 2 (39 marks) Roundworm Ltd is a group of companies with a 31 December year-end. The Roundworm group financial statements for the years 20.21 and 20.22 are given below:...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,400 cases of wine at a price of 240 euros per case. The total purchase price is 336,000...
On November 1, year 1, Dixon Corporation issued $ 800,000 of its 10- year, 8% term bonds dated October 1, year 1. The bonds were sold to yield 10%, with total proceeds of $ 700,000 plus accrued...
The water in tank A is at 270 F with quality of 10% and mass 1 lbm. It is connected to a piston/cylinder holding constant pressure of 40 psia initially with 1 lbm water at 700 F. The valve is opened,...
Assume that Microsoft has no debt, a total market value of $300 billion, and a marginal tax rate of 21%. If it permanently changes its leverage from no debt by taking on new debt in the amount of 13%...
Braxton Enterprises currently has debt outstanding of $35 million and an interest rate of 8%. Braxton plans to reduce its debt by repaying $7 million in principal at the end of each year for the next...
Grommit Engineering expects to have net income next year of $20.75 million and free cash flow of $22.15 million. Grommits marginal corporate tax rate is 20%. a. If Grommit increases leverage so that...
FINANCIAL STATEMENT ANALYSIS INSTRUCTIONS 1. PREPARE RATIO ANALYSIS REPORT ( word file) Format 1. Introduction 2. Importance of Financial Statements 3. Importance of Financial statement analysis and...
Let us assume that Europe is in recession, China's economy is slowing down, and the US economy is growing at 1-2%. Use these assumptions to invest in 4 ETFs (electronically traded funds). The 4 ETFs...
A section 83(b) election creates ordinary income at the time of the grant. Ture or False

If the valuation using comparables indicates the acquisition price is reasonable compared to other firms in the

Question:

Step by Step Answer:

While a reasonable valuation compared to industry comparables is an important factor to consider when evaluating an acquisition opportunity it alone d...View the full answer

Corporate Finance

Students also viewed these Business questions