Answer:
(a) The stock price of Harrods be after the acquisition is £ 31.45
(b) The exchange ratio between the two stocks would be 0.8550
Explanation:
Harrods PLC has a market value of £139 million and 5 million shares outstanding.
Selfridge Department Store has a market value of £41 million and 2 million shares outstanding.
a) If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge
Shares outstanding = 5 + 1.2 = 6.2 million
Stock price = £ 195 million ÷ 6.2 million = £ 31.45
b) alpha × 195 = 51
alpha = £51 million ÷ £195 million
= 26.15%
(195 ÷ ( 5 +X ) ) × X = 51
51 (5+X) = 195X
255 + 51X = 195X
144X = 255
X = 1.77 million shares
Exchange ratio would be: 1.77 ÷ 2
= 0.8550
Answer: Introduction, supporting details, and conclusion.
Answer:
133.51
Explanation:
five point one percent of 2617.75
It is important to define some basic concepts. Inflation means the lowering of the value of money due to time; it can be attributed to the fact that as the standards of life are rising, commodities' prices also rise. The interest rate is indicative of how much profit one can have on a specific amount of money in the period of one year (if this weren't the case, we would all invest our money than keep it at the bank). Thus a change in the interest rate in US, the pound would not be affected since Dollars are not converted to Pounds this way; but a change in the inflation rate would mean that the pound could buy more products from the US. Similarly, since there are a lot of financial trades between the US and Japan, a change in the inflation rate in either of these countries would not affect their currencies. But a change in the interest rate would change a lot. Thus, the rifht answer is d. (Income level is rather irrelevant).