I Can Do This, Inc. (I CAN) is considering an acquistion of FINANCE. The following financial information

of both companies is provided. In addition, I CAN believes the transaction would generate $150,000 of synergies.

Note: For this problem, assume I Can Do does not have any excess cash.

Questions:

a. What would be the total pro forma value of the combined firm?
b. Assuming a cash transaction, what would be FINANCE's and I CAN's, respective, reservation prices/share?
c. Using your answer in Q1, based on where other publicly traded companies trade, what would be a fair price for I CAN to pay for FINANCE on a per share basis? Why?
d. Based on your answer in 2C, assuming a stock transaction, how many shares of I CAN would each shareholder of FINANCE receive.

Below are the results you should get:

a. Pro forma = $11.061 million
b. I CAN reservation = $26.40; FINANCE reservation = $24.40
c. Qualitative (It should be an explanation)
d. 0.84 shares of CAN for 1 share of FINANCE

Help please

7 I Can Do This, Inc. (I CAN) is considering an acquistion of FINANCE. The following financial information 8 of both companies is provided. In addition, I CAN believes the transaction would generate $150,000 of synergies. 9 Note: For this problem, assume I Can Do does not have any excess cash. Annual Income Statement (in thousands, except per share data) a. What would be the total pro forma value of the combined firm? b. Assuming a cash transaction, what would be FINANCE's and I CAN's, respective, reservation prices/share? c. Using your answer in Q1, based on where other publicly traded companies trade, what would be a fair price for I CAN to pay for FINANCE on a per share basis? Why? d. Based on your answer in 2C, assuming a stock transaction, how many shares of I CAN would each shareholder of FINANCE receive. a. Pro forma =$11.061 million b. I CAN reservation =$26.40; FINANCE reservation =$24.40 c. Qualitative d. 0.84 shares of CAN for 1 share of FINANCE