Question
PLEASE HELP!!!!!!! As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a companys financial performance.
PLEASE HELP!!!!!!! As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a companys financial performance. You collected the following data. Firm A Firm T Price per share $70.00 $15.00 Total earnings $700.00 $100.00 Share outstanding $200.00 $80.00 Total Value $14,000.00 $1,200.00 Suppose Company A will acquire Company T. Company A will offer two new share of A for every five shares of T. (keep two decimal places please.) I. If investors are aware that there are no economic gains from the merger, please answer part a, b, and c
a. what will be the total number of shares for the combined company after the merger? (sample answer: 138
b. what will be the price per share for the combined company after the merger? (sample answer: $138.45)
c. what will be the price-earnings ratio for the combined company after the merger? (sample answer: 38.45) II. Now suppose that the merger really does increase the value of the combined firm by $5000, please answer part b, c, and d
d. what will be the price per share for the combined company after the merger? (sample answer: $138.45)
e. what is the price-earnings ratio for the combined company after the merger? (sample answer: 27.50)
f. what is the final merger premium in dollar does Company A pay to Company T (sample answer: $450.50)
g. what is the initial merger premium promised in dollar does Company A pay to Company T (sample answer: $450.50)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started