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.

1. (8 marks) What do you recommend for the total value of the food division? What about the retail grocery division?
2. (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?
3. (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?

Statement of Comp. Income (Food Manufacturing Division)
Sales	2,000
Cost of goods sold	700
Depreciation	300
EBIT	1,000
Interest paid	200
Taxable income	800
Taxes (40%)	320
Net Income	480

Statement of Comp. Income (Retail Grocery Division)
Sales	2,500
Cost of goods sold	1,400
Depreciation	500
EBIT	600
Interest paid	100
Taxable income	500
Taxes (40%)	200
Net Income	300

Statement of Comp. Income (Consolidated Statement)
Sales	4,500
Cost of goods sold	2100
Depreciation	800
EBIT	1,600
Interest paid	300
Taxable income	1,300
Taxes (40%)	520
Net Income	780

Companies similar to Tamed Inc.	Industry	Price-to-earnings ratio	Price/Sales ratio
CA. Shop Co.	Grocery	14	3
Sunny Co.	Grocery	15	3.5
Raspberry Co.	Food	18.5	5
Pasta Inc.	Food	18	4.5
ShopWithUS Co.	Grocery	14.5	4
PeachPerfect Inc.	Food	19	6