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BartSMP [9]
3 years ago
6

VelSad is contemplating the acquisition of Po, Inc. The values of the two companies as separate entities are $32 million and $16

million, respectively. VelSad estimates that by combining the two companies, it will reduce marketing and administrative costs by $560,000 per year in perpetuity. VelSad can either pay $20 million cash for Po or offer Po a 44% holding in VelSad. The opportunity cost of capital is 10%.What is the cost of the stock offer?
Business
1 answer:
svetoff [14.1K]3 years ago
7 0

Answer:

7.58m

Explanation:

The VelSad is considering to acquire Po, Inc. by offer of 20 million cash or either 44% holding. The cost of acquisition refers to all cost incurred by a company to acquire another company. The benefit VelSad can get after acquiring Po, Inc is that it can save marketing and administrative cost by $560,000 every year. The cost of stock offer is 7.58 million. This is calculated by taking 44% of VelSad value and then discounting it at cost of capital which is 10%.

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Answer:

Explanation:

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For Cullumber Company:

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3 0
3 years ago
Early access to medical care, from ems through reperfusion, improves overall outcomes by:________
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We can actually deduce here that early access to medical care, from ems through reperfusion, improves overall outcomes by: B. Faster access to medications that increase blood clotting.

<h3>What is EMS?</h3>

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The options that complete the question are:

A. Increased access to social support services

B. Faster access to medications that increase blood clotting

C. Delaying onset of hypothermia

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5 0
1 year ago
Banks pay their customers interest on the money in their accounts for what reason? A. That money earns interest when the bank lo
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Answer:

A. That money earns interest when the bank loans it out.

Explanation:

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4 0
3 years ago
what is an everyday example of scarcity that demonstrates why scarcity is a basic economic problem that faces society?
zhannawk [14.2K]

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7 0
3 years ago
Ekmark Corporation uses the following activity rates from its activity based costing to assign overhead costs to products: Activ
mel-nik [20]

Answer:

The correct answer is $10,014.40.

Explanation:

According to the scenario, computation of the given data are as follows:

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8 0
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