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it is one question please do it clearly BQ. Inc. Is considering making an offer to purchase Report Publications. The vice president of finance has
it is one question please do it clearly
BQ. Inc. Is considering making an offer to purchase Report Publications. The vice president of finance has collected the following Information: 8Q IReport Price-earnings ratio 14 9.6 outstanding Earnings 1,600,000 150,000 $3,600,000 $630,000 DIMdends 860,000 $310,000 BQ also knows that securities analysts expect the earnings and dividends of IReport to grow at a constant rate of 6 percent each year. BQ management belleves that the acquisition of Report will provide the firm with some economles of scale that wil Increase this growth rate to 8 percent per year. a. What Is the value of IReport to BQ? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g.. 3216.) calculations and round your answer to 2 decimal places, e.g., 3216.) acquisltion be? (Do not round intermediate calculations and round your answer to 2 b. What would BQ's galn be from this acquisition? (Do not round Intermedlate c. If BQ were to offer $44 In cash for each share of IReport, what would the NPV of the d. What's the most BQ should be willing to pay In cash per share for the stock of e. If BQ were to offer 270,000 of its shares In exchange for the outstanding stock of decimal places, e.g. 3216.) IReport? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 3216.) IReport, what would the NPV be? (Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g. 3216.) a. Value of iReport b. Gain c. NPV d. Maximum share price e. NPV a. Value of iReport b. Gain c. NPV d. Maximum share price e. NPV BQs outslde financlal consutants think that the 8 percent growth rate is too optimistic and a 7 percent rate Is more reallstic. f-1. What is the value of IReport to BQ now? (Do not round Intermedlate calculations f-2. What would BQ's galn be from this acquisition? (Do not round Intermedlate f-3. If BQ were to offer $44 In cash for each share of IReport, what would the NPV of the and round your answer to 2 decimal places, e.g., 3216.) calculations and round your answer to 2 decimal places, e.g. 3216.) acquisition be? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 3216.) f-4. Whats the most BQ should be willing to pay In cash per share for the stock of Report? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 3216.) f-5. If BQ were to offer 270,000 of Its shares In exchange for the outstanding stock of Report, what would the NPV be? (A negative answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g., 3216.) f-1. Value of iReport f-2. Gain f-3. NPV f-4. Maximum share price f-5. NPVStep by Step Solution
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