Question
Pansy Petals Berhad has 1 million shares outstanding, each of which has a price of RM20. It has made a takeover offer of Sweet Stems
Pansy Petals Berhad has 1 million shares outstanding, each of which has a price of RM20. It has made a takeover offer of Sweet Stems Corporation which has 1 million shares outstanding priced at RM15 per share. Both company have earnings of RM5 per share. Assumes that the takeover will occur with certainty and there are no synergies to merge the two firms.
- Find the post takeover value of Pansy Petals Berhad after the acquisition.
- Calculate the number of shares must Pansy Petals Berhad offers to Sweet Stems Corporation in exchange of their share.
- Find the new price of Pansy Petals Berhad post takeover.
- Calculate earnings per share of Pansy Petals Berhad after the acquisition.
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Valuation, Measuring And Managing The Value Of Companies
Authors: Tim Koller, Marc Goedhart, David Wessels
7th Edition
1119611865, 9781119611868
