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vredina [299]
3 years ago
10

Firm X is being acquired by Firm Y for $35,000 worth of Firm Y stock. The incremental value of the acquisition is $2,500. Firm X

has 2,000 shares of stock outstanding at a price of $16 a share. Firm Y has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the acquisition using company stock?
Business
1 answer:
UkoKoshka [18]3 years ago
5 0

Answer:

$34,789

Explanation:

Worth of stocks = $35,000

Incremental value of the acquisition = $2,500

Stock outstanding of Firm X = 2,000

Price per share of Firm X = $16

Stock outstanding of Firm Y = 1,200

Price per share of Firm Y = $40

Now,

Number of shares issued =  35,000 ÷ 40

or

= 875 shares

Value after merger = (Value of Stock x + Value of Stock Y + Synergy)

= (1200 × 40) + (2000 × 16) + 2500

or

= $82,500

Number of Stock Outstanding after merger  = ( 1,200 + 875 )

= 2,075

Thus,

Value per share after merger = $82500 ÷ 2,075

= 39.759

Therefore,

Actual cost of acquisition

= Value per share after merger × Number of shares issued

= 875 × $39.759

= $34,789

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Sonbull [250]

Answer:

40%

Explanation:

Oriole company has an actual sales of $1,100,000

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Therefore, the margin of safety can be calculated as follows

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= 0.4×100

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Hence the margin of safety is 40%

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sertanlavr [38]

Answer:

a. Contribution margin per passenger ($50-$20) = $30

b. Contribution margin ratio (30/50) = 60%

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Explanation:

a. Contribution formula = Sale - Variable Cost

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Variable Cost per passenger = $20

Contribution margin per passenger ($50-$20)  = $30

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Contribution Margin per passenger =$30

Total Contribution margin for 13000 passenger = 13000*30 =                                    $390,000

Less: Fixed Cost = 270,000

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3 0
3 years ago
Read 2 more answers
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kykrilka [37]

Answer:

informational

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3 0
3 years ago
Ben gordon, inc. manufactures 2 products, wheels and seats. the company has estimated its overhead in the assembling department
k0ka [10]
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