Question
can someone solve this question? ABC has 1M shares outstanding, with a PPS of $20. It has made a takeover offer of XYZ, which has
can someone solve this question?
ABC has 1M shares outstanding, with a PPS of $20. It has made a takeover offer of XYZ, which has $1M shares outstanding and PPS of $2.5. Assume the takeover will happen with certainty, and there are no synergies. ABC made a cash offer to buy XYZ for $3M.
(a) What will be ABC s stock price post-announcement?
(b) What will be XYZ s stock price post-announcement?
(c) What premium to XYZ s equity holders (in percentage terms) does this offer represent?
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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
