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please help me to solve this question. I need the answers before 11:30pm.Highlight the answers .please I need the answers now .thank you Excel Online
please help me to solve this question. I need the answers before 11:30pm.Highlight the answers .please I need the answers now .thank you
Excel Online Structured Activity: Merger Valuation Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.8%. Assume that the risk-free rate of interest is 7% and the market risk premium is 5%. Both Vandell and Hastings face a 30% tax rate. Hastings estimates that if it acquires Vandell, interest payments will be $1,600,000 per year for 3 years after which the current target capital structure of 30% debt will be maintained. Interest in the fourth year will be $1.456 million after which interest and the tax shield will grow at 5%. Synergies will cause the free cash flows to be $2.3 million, $2.8 million, $3.3 million, and then $3.56 million in Years 1 through 4, respectively, after which the free cash flows will grow at a 5% rate. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is the unlevered value of Vandell? Vandell's beta is 1.10. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000, not 1.2. Do not round intermediate calculations. Round your answer to two decimal places. 933 Open Spreadsheet What is the unlevered value of Vandell? Vandell's beta is 1.10. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000, not 1.2. Do not round intermediate calculations. Round your answer to two decimal places. 93 X What is the value of its tax shields? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000, not 1.2. Do not round intermediate calculations. Round your answer to two decimal places. What is the per share value of Vandell to Hastings Corporation? Assume Vandell now has $9.80 million in debt. Do not round intermediate calculations. Round your answer to the nearest cent. per share Check My Work Reset Problem Next Autosaved at 10:51 PM 10:56 Back 30.00% 70.00% 1,000,000 $9,800,000 3 Current target capital structure: 4 Debt 5 Equity 6 Number of common shares outstanding Current debt amount 8 9 Debt interest rate 10 Risk-free rate 11 Market risk premium 12 Tax rate 13 Beta 14 Interest payments, Years 1 - 3 15 Interest payment, Year 4 16 Growth rate 17 Free cash flow, Year 1 18 Free cash flow. Year 2 19 Free cash flow, Year 3 20 Free cash flow, Year 4 7.80% 7.00% 5.00% 30.00% 1.10 $1,600,000 $1,456,000 5.00% $2,300,000 $2.800,000 $3,300,000 $3,560,000 22 Formulas Calculate target firm's levered cost of equity Sheet1 eti Saved to CengageStep by Step Solution
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