QUESTION (I only have this last attempt, hope you can solve all of it, will thumbs up later)

You are given the pre-merger information about ABC Group and XYZ Enterprise. ABC is interested to acquired XYZ after the recent Board of Directors decision to expand the groups operation. Assume that both firm has no debts outstanding.

Given that:

The shares outstanding and the price per share of ABC is 5,000 and $36 respectively, & the shares outstanding and the price per share of XYZ is 1,200 and $25 respectively.

ABC has estimated that the value of the synergistic benefits from acquiring XYZ is $9,500.

Required: Show all steps

A.

i. If XYZ is willing to be acquired for $30 per share in cash, calculate the NPV of the merger.

ii. Based on answer (i), calculate the price per share of the merged firm.

B.

i. Supposed XYZ is agreeable to a merger by an exchange of stock. If ABC offers 5 of its share for every 6 of XYZs shares, what will the price per share of the merged firm be?

ii. Based on answer (i), calculate the NPV of the merger.