A target company was acquired at the end of Year $0.$ The acquirer purchased $100\%$ of the equity. Calculate the return on beginning invested capital in year $1.$ A target company was acquired at the end of Year $0.$ The acquirer purchased $\backslash (100\backslash \%\backslash )$ of the equity. Calculate the return on beginning invested capital in year $\backslash (1.\backslash )$Acquiring Company is considering the acquisition of Target Company in a share$-$for$-$share $($all

equity$)$ transaction in which Target Company would receive the share equivalent of $$50\mathrm{.}00$ for

each share of its common stock. No preferred equity or cash for both companies. The synergies

generated from this merger is expected to be $$400,000.$ Ignore transaction cost, legal fees and

banker fess.

Using the preceding information about the two firms, and showing your work, calculating the

following:

Q$1.$ How many new shares are issued by the Acquiring Company?

Q$2.$ What is the post$-$merger share value?

Q$3.$ What is post$-$merger ownership distribution? $($That is$,$ what are the $\%$ of equity ownerships by

pre$-$merger Acquiring Co$.$ and Target Co$.,$ respectively?$)$

Q$4$: What is the acquisition premium for the target firm stock?