Question
19.a. Seaside Corp. had sales of $814 million and a cost of goods sold of $420 million in 2020. A simplified balance sheet for the
19.a. Seaside Corp. had sales of $814 million and a cost of goods sold of $420 million in 2020. A simplified balance sheet for the firm appears below:
Assets ($ millions) | Liabilities and Equity ($ millions) | ||
Cash | 50 | Accounts payable | 50 |
Accounts receivable | 70 | Notes payable | 850 |
Inventory | 120 | Accruals | 125 |
Net plant, property, and equipment | 7000 | Long term debt | 2400 |
|
| Common equity | 3815 |
Total assets | 7240 | Total liabilities and equity | 7240 |
Seasides cash conversion cycle and operating cycle are closest to:
| 77 days and 224 days |
| 77 days and 255 days |
| 92 days and 136 days |
| 92 days and 145 days |
| None of the above |
19.b. Consider the following premerger information about an acquiring firm (Firm A) and a target firm (Firm T). Assume that both firms have no debt outstanding.
| Acquirer (Firm A) | Target (Firm T) |
Shares outstanding | 5,000 | 4,200 |
Price per share | $60 | $50 |
Firm A has estimated that the present value of the synergistic benefits from acquiring Firm T is $12,500. Suppose that Firm T is agreeable to a merger by an exchange of stock. If Firm A offers four of its shares for every seven of Firm Ts shares, the price per share of the merged firm will then be closest to:
| $24.91 |
| $57.41 |
| $70.61 |
| $91.57 |
| None of the above |
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