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on 27 ed out of question Sea Corporation has 10000 shares outstanding and its stock is trading at 22 dollars per share. Sea Corporation is
on 27 ed out of question Sea Corporation has 10000 shares outstanding and its stock is trading at 22 dollars per share. Sea Corporation is thinking of buying River Corporation, which has 4000 shares outstanding and a price per share of 13 dollars. Sea Corporation will pay for River Corporation by issuing new shares. If Sea Corporation offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy River Corporation. There are no expected synergies from the transaction. Answer the following questions 6(a) to 6(d). Note: For all the calculation questions, you are only allowed to write the numerical answer you calculated for the question, please DO NOT add $, %, dollars, million, thousand, percent, space, etc. in your answers. 6(a): How many new shares Sea Corporation will have to issue in order to fund the deal? (Round your final answer to the nearest integer if needed) Answer: 6(b): What will be the value of Sea Corporation after the acquisition? on 28 F red out of Answer: estion 29 6(c): What will be the price per share of Sea Corporation after the acquisition? (Round your final answer to 2 decimal places if needed) t yet swered erked out of 10 Flag question Answer: estion 30 tyet swered Erked out of 10 6(d): There are mainly two payment methods in mergers and acquisitions, cash and shares payments. Suppose you are the shareholder of the target firm, River Corporation, which payment method would you prefer? Explain why. Flag question on 27 ed out of question Sea Corporation has 10000 shares outstanding and its stock is trading at 22 dollars per share. Sea Corporation is thinking of buying River Corporation, which has 4000 shares outstanding and a price per share of 13 dollars. Sea Corporation will pay for River Corporation by issuing new shares. If Sea Corporation offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy River Corporation. There are no expected synergies from the transaction. Answer the following questions 6(a) to 6(d). Note: For all the calculation questions, you are only allowed to write the numerical answer you calculated for the question, please DO NOT add $, %, dollars, million, thousand, percent, space, etc. in your answers. 6(a): How many new shares Sea Corporation will have to issue in order to fund the deal? (Round your final answer to the nearest integer if needed) Answer: 6(b): What will be the value of Sea Corporation after the acquisition? on 28 F red out of Answer: estion 29 6(c): What will be the price per share of Sea Corporation after the acquisition? (Round your final answer to 2 decimal places if needed) t yet swered erked out of 10 Flag question Answer: estion 30 tyet swered Erked out of 10 6(d): There are mainly two payment methods in mergers and acquisitions, cash and shares payments. Suppose you are the shareholder of the target firm, River Corporation, which payment method would you prefer? Explain why. Flag
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