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Please show clear answers for each question Smitty Nursing Homes Ltd is cash rich because of several consecutive good years. One of the alternative uses
Please show clear answers for each question
Smitty Nursing Homes Ltd is cash rich because of several consecutive good years. One of the alternative uses for the excess funds is an acquisition. Linda Wade, Smitty's treasurer, has been asked to place a value on a potential target, Hill Long Term Care, a small chain in an adjacent state. The table below indicates Wade's estimates of Hill's earnings potential if it came under Smitty's management (in millions of dollars). The interest expense here includes the interest on Hill's existing debt and on new debt - Should Smitty make an offer for Hill? - If so, what is the range of how much Smitty should offer per share of Hill? - Construct a table that shows the gain/loss per share for Smitty and Hill over the range of offer per share (in one-dollar increments), and graph the resultsStep by Step Solution
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