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Hi please answer i. -> Rubicon LLC announced a bid to take over Minas Gerais Pty Limited. Rubicon LLC has 3 million shares outstanding, selling
Hi please answer
i. -> Rubicon LLC announced a bid to take over Minas Gerais Pty Limited. Rubicon LLC has 3 million shares outstanding, selling at $15 per share. Minas Gerais Pty Limited has 2 million shares outstanding, selling at $7.50 per share. Rubicon LLC estimated the potential economic gain form the merger to be $5,000,000.1 If Minas Gerais Pty Ltd could be acquired for $9 per share, what is the NPV of the Merger to Rubicon LLC?| ii. What will Rubicon LLC shares sell for when the market learns that it plans to acquire Minas Gerais Pty Ltd for $9 per share? What will Minas Gerais Pty Ltd shares sell for? What are the percentage gains to the shareholders of each firm? iii. If instead of a cash payment Rubicon LLC acquired Minas Gerais Pty Ltd through a share exchange what would be percentage gains if: for each share in the Minas Gerais Pty Ltd shareholders receive 0.6 of one share in Rubicon LLC. What will be the price per share of the merged firm?| iv. What is the NPV of the merger to Rubicon LLC when it uses an exchange of shares? If your answer differs explain why this is so. | b) Compare the horizontal and vertical-mergers (Hint: define and compare each type, refer to any economic justification and sources of value and costs). TStep by Step Solution
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