Question
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 | |
| Shares outstanding | 1,700 | 900 |
| Price per share | $31 | $26 |
| Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $2,900. |
If Firm T is willing to be acquired for $29 per share in cash, what is the NPV of the merger? |
If Firm T is willing to be acquired for $29 per share in cash, what will the price per share of the merged firm be? |
| If Firm T is willing to be acquired for $29 per share in cash, what is the merger premium? |
Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers three of its shares for every 5 of T's shares, what will the price per share of the merged firm be? |
Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers three of its shares for every 5 of T's shares, what is the NPV of the merger? |
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If Firm T is willing to be acquired for 29 per share in cash what is the NPV of the merger The NPV of the merger is the difference between the value o...
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
