Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Questions 12.. YRL Inc. is considering the acquisition of the Target Inc. YAL has 112 million shares outstanding and the stock price is $3.89. Target

Questions 12..

YRL Inc. is considering the acquisition of the Target Inc. YAL has 112 million shares outstanding and the stock price is $3.89. Target has a market capitalization of $408 million and has 51 million shares outstanding. The combined entity will be worth $1.030 million.

A. If YAL issues 97 million new shares to acquire Target, what is the NPV of the acquisition to YAL?

B. What is the premium (in %) received by Target's shareholder i Part A?

C. If the synergy will be equally shared by the two groups of shareholders, what is the exchange ratio?

D. What is the maximum number of shares YAL would issue to acquire Target?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance A Contemporary Application Of Theory To Policy

Authors: David N. Hyman

6th Edition

0030213088, 9780030213083

More Books

Students also viewed these Finance questions