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Bentley Corporation 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 Corporation 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 currently has a bond issue outstanding with a face value of $143,000. Rolls is an all-equity company. a. What is the value of each company before the merger? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. What are the values of each company's debt and equity before the merger? (Leave no cells blank - be certain to enter " 0 " wherever required. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Answer is complete but not entirely correct. c. If the companies continue to operate separately, what are the total value of the companies, the total value of the equity, and the total value of the debt? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Answer is complete but not entirely correct. d-1. What would be the value of the merged company? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Answer is complete and correct. d-2. What would be the value of the merged company's debt and equity? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Answer is complete and correct. e-1. How much would shareholders gain or lose in the merger? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Enter a gain as a positive number and a loss as a negative number.) Answer is complete but not entirely correct. Shareholders' gain or loss e-2. How much would bondholders gain or lose in the merger? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Enter a gain as a positive number and a loss as a negative number.) Answer is complete but not entirely correct
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