Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Company A has agreed to buy Company B for $55.00/share in stock. Company A and Company Bs stock prices on the day before announcement were

Company A has agreed to buy Company B for $55.00/share in stock. Company A and Company Bs stock prices on the day before announcement were $112.00 and $42.00 respectively. Company B has 200,000 shares outstanding, 120,000 exercisable options outstanding with an average exercise price of $28.00 per share, $1.2 million in net debt to be assumed by Company A and minority interests of $250,000 to be acquired for cash.

Calculate the premium paid.

Group of answer choices

25%

31%

29%

18%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Ebay Tips And Tricks To Increase Your Ebay Sales

Authors: Jessica Wilson

1st Edition

1774854015, 978-1774854013

More Books

Students also viewed these Finance questions

Question

Identify and explain effective strategies for preparing for tests.

Answered: 1 week ago