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Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T) Assume that both firms have no debt outstanding
Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T) Assume that both firms have no debt outstanding Firm B Firm T 6,600 2,500 $ 47 S 21 Shares outstanding Price per share Firm B has estimated that the value of the synergistic benefits from acquiring Firm Tis $9,900 a. If Firm T is willing to be acquired for $23 per share in cash, what is the NPV of the merger? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) NPV b. What will the price per share of the merged firm be assuming the conditions in (a)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price c. If Firm T is willing to be acquired for $23 per share in cash, what is the merger premium (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Merger premium d. Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one of its shares for every two of T 's shares, what will the price per share of the merged firm be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price per share e. What is the NPV of the merger assuming the conditions in (d)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
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