Question 3: Wild Corporation is in the process of acquiring Tamed Inc. Tamed Inc. has two divisions: food manufacturing and retail grocery. The current number of outstanding shares is 200. a) (8 marks) What do you recommend for the total value of the food division? What about the retail grocery division? b) (7 marks) The management of Tamed Inc. has informed us that the Cost of goods sold for the Retail Grocery division was abnormally high this year due to the temporary closure of one of the local suppliers. We expect a much lower Cost of goods sold for that division in the future. Given this information, what do you recommend for the total value of the food division? What about the retail grocery division? c) (3 marks) Wild Corporation is offering $92 per share. Given the information in part (b), would you recommend the shareholders of Tamed Inc. to accept the offer or decline it? Why? State of Comp. Inese Food Manlalarley Distan) Sales 2006 Custofa 700 Depreciation MO ERIT 1.000 Interest paid 200 Table NO Tas (409) Net State of Camp. Income Grocery Di 2500 Clogs said 1400 Deprecat SO ERIT 100 Tudice 500 200 Net Inc 300 Statemer-Comp. Income Ciated State) Sales 500 Custofgoede sold 2100 Depreciatine SOO ERIT 1600 Intere paid 100 Tube 100 Tau (409) Nella T Industry Price-to-earnings ratio Price Sales Companies similar to Tamed lac CA. Shop Co. Sunny Co. Raspberry Co Pasta Int. Shop With US Co Peach Perfect Inc. Grocery Crocery Food Food Grocery Food 14 15 18.5 IN 14: 35 5 43 4 MacBook Air Question 3: Wild Corporation is in the process of acquiring Tamed Inc. Tamed Inc. has two divisions: food manufacturing and retail grocery. The current number of outstanding shares is 200. a) (8 marks) What do you recommend for the total value of the food division? What about the retail grocery division? b) (7 marks) The management of Tamed Inc. has informed us that the Cost of goods sold for the Retail Grocery division was abnormally high this year due to the temporary closure of one of the local suppliers. We expect a much lower Cost of goods sold for that division in the future. Given this information, what do you recommend for the total value of the food division? What about the retail grocery division? c) (3 marks) Wild Corporation is offering $92 per share. Given the information in part (b), would you recommend the shareholders of Tamed Inc. to accept the offer or decline it? Why? State of Comp. Inese Food Manlalarley Distan) Sales 2006 Custofa 700 Depreciation MO ERIT 1.000 Interest paid 200 Table NO Tas (409) Net State of Camp. Income Grocery Di 2500 Clogs said 1400 Deprecat SO ERIT 100 Tudice 500 200 Net Inc 300 Statemer-Comp. Income Ciated State) Sales 500 Custofgoede sold 2100 Depreciatine SOO ERIT 1600 Intere paid 100 Tube 100 Tau (409) Nella T Industry Price-to-earnings ratio Price Sales Companies similar to Tamed lac CA. Shop Co. Sunny Co. Raspberry Co Pasta Int. Shop With US Co Peach Perfect Inc. Grocery Crocery Food Food Grocery Food 14 15 18.5 IN 14: 35 5 43 4 MacBook Air
