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can someone please solve this properly? only right answers in this photo are question c and d)SDP. Questions a,b,SCC,e and f are wrong answers in
can someone please solve this properly? only right answers in this photo are question c and d)SDP. Questions a,b,SCC,e and f are wrong answers in this photo. Very thanks.
Problem 21-6 Stock versus Cash Offers (LO2) Sweet Cola Corporation (SCC) is bidding to take over Salty Dog Pretzels (SDP). SCC has 2,500 shares outstanding. selling at $50 per share. SDP has 1,500 shares outstanding, selling at $17,50 a share. SCC estimates the economic gain from the merger to be $17,000. a. If SDP can be acquired for $19 a share, what is the NPV of the merger to SCC? b. What will SCC sell for, per-share, when the market learns that it plans to acquire SDP for \$19 a share? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. What will SDP sell for, per share, if the market learns about the acquisition? d. What are the percentage gains to the shareholders of each firm? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. e. Now suppose that the merger takes place through an exchange of stock. On the basis of the premerger prices of the firms, SCC sells for $50, so instead of paying $19 cash, SCC tssues 0.38 of its shares for every SDP share acquired. What will be the price of the merged firm? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. f. What is the NPV of the merger to SCC when it uses an exchange of stock? Note: Do not round intermediate calculations. Round your answer to 2 decimal places Step by Step Solution
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