Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. You are the CEO of a private company and want to buy it. There is one major shareholder who owns 70 percent of the

1. You are the CEO of a private company and want to buy it. There is one major shareholder who owns 70 percent of the firm. The remaining 30 percent is held by oceanic shareholders. Based on a DCF model, you estimate the base value of the firm to be $150 million. This excludes any liquidity discount and/or control premium. Based on your observations of the market, liquidity discounts are about 20 percent and control premiums are about 30 percent for similar deals. Your firm has 75 million shares outstanding. What would you offer to pay per share to the controlling shareholder? To the oceanic shareholders?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance At 40 Financial Intelligence

Authors: MOIRA O'NEILL Moira O'Neill

1st Edition

1408101114, 978-1408101117

More Books

Students also viewed these Finance questions

Question

What is a numerically controlled machine?

Answered: 1 week ago

Question

1. Signs and symbols of the map Briefly by box ?

Answered: 1 week ago

Question

Types of physical Maps?

Answered: 1 week ago

Question

Explain Intermediate term financing in detail.

Answered: 1 week ago