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pls answer the following. thanks Xx brewing company purchases another brewer, Dore, to provide revenue enhancement through market dominance. Supply the? Xx 4M Dore 1M
pls answer the following. thanks
Xx brewing company purchases another brewer, Dore, to provide revenue enhancement through market dominance. Supply the? Xx 4M Dore 1M 0.5M ? 0.1M ? 8 ? 5 ? Present earnings Shares outstanding eps Price/earnings ratio Market value per share Exchange ratio Shares received from the merger Revised shares outstanding Revised eps Post merger eps as related to share previously held ? (4 decimals) ? ? (2 decimals) ? (2 decimals) For exchange ratio (Dore), assume that Dore is offered 58/share/ Supply the ? : Before merger Before merger After merger Beta (buyer) Omicron (buyer) Beta Net tangible assets 7500 1100 Goodwill 0 0 ? Total assets 7500 1100 debt 2500 500 Shareholder's equity 5000 600 Total debt and 7500 1100 shareholder's equity With the purchase method, the total assets of the acquired company are written up to 1600 Suppose the following free cash flows are expected from a prospective acquisition: Average for years 1-5 6-10 3600 11-15 2800 16-20 1600 21-25 400 4000 Annual after- tax operating cash flows from acquisition Net investment 1200 600 0 0 2800 1600 400 Cash flow after taxes Cost of capital, acquiring firm: 10% Cost of capital, acquiree firm: 12.75% 1. The appropriate discount rate to use % 2. The present value of the expected free cash flows would be (2 decimals)
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