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Bentley Corp. and Rolls Manufacturing are considering a merger. The possible states of the economy and each company's value in that state are shown here:
Bentley Corp. and Rolls Manufacturing are considering a merger. The possible states of the economy and each company's value in that state are shown here: State Boom Recession Probability 0.70 0.30 Value of Bentley Value of Rolls. Bentley currently has a bond issue outstanding with a face value of $136,000. Rolls is an all-equity company. a. What is the value of each company before the merger? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.) Bentley Rolls $ 312,000 $ 282,000 $ 121,000 $ 91,000 Value of the Rolls equity Value of the Rolls debt Value of the Bentley's equity Value of the Bentley's debt $ $ b. What are the values of each company's debt and equity before the merger? (Enter the answer in dollars, not millions of dollars. Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response.) $ $ $ $ c. If the companies continue to operate separately, what are the total values of the companies, the equity, and the debt? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.) Total value Total value of the equity Total value of the debt. $ $ $ d-1. What would be the value of the merged company? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.) Merged company value $ d-2. What would be the value of the merged company's debt and equity? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.) Merged equity value Merged debt value $ e-1. Is there a transfer of wealth in this case
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