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lisov135 [29]
3 years ago
11

American Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern Hardware. American's analysts p

roject that the merger will result in incremental free flows and interest tax savings with a combined present value of $72.52 million, and they have determined that the appropriate discount rate for valuing Eastern is 16 percent. Eastern has 4 million shares outstanding. Eastern's current price is $16.25. What is the maximum price per share that American should offer?
Business
1 answer:
Travka [436]3 years ago
4 0

Answer:

The maximum price per share that American should offer is $18.13 per share

Explanation:

The computation of the maximum price per share is shown below:

= Present value ÷ Number of outstanding shares

= $72.52 million ÷ 4 million shares

= $18.13 per share

For computing the maximum price, we used the present value and the discount rate is irrelevant in the computation part. Hence, it is ignored plus the current price is also ignored.

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The company experienced cannibalization from the new car from its existing product line.
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2 years ago
Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 45 million cases of cola were sold ever
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Answer:

Tax on a case of cola is $4 per case.

The burden that falls on consumers is $1 per case.

The burden that falls on producers is $3 per case

False. This is due to the fact that producers already carry a greater share of the tax burden.

Explanation:

Tax on a case of cola = Amount that consumers pay after the tax has been charged - Amount producers receive = $7 - $3 = $4 per case

Burden on consumers = Amount consumers pay after the tax has been levied - Amount consumers pay before tax was levied = $7 - $5 = $1 per case

Burden on producers = Tax on a case of cola - Burden on consumers = $4 - $1 = $3 per case

False. This is due to the fact that producers already carry a greater share of the tax burden.

4 0
3 years ago
How will a drastic fall in the price of necklaces affect the quantity of necklaces that rachel supplies? explain your answer. 12
Eduardwww [97]

Price and quality exist positively correlated.  A drastic fall in the price of a necklace shows a drastic fall in its quality.

<h3>What is price?</h3>

A price exists as the quantity of payment or compensation provided by one group to another in return for goods or services. In some situations, the price of production has various names. If the product exists as a "good" in the commercial exchange, the payment for this product will likely be named its "price".

A positive correlation exists as a connection between two variables that move in tandem—that is, in the same direction. A positive correlation exists when one variable decreases as the other variable declines or one variable increases while the other increases.  A positive correlation indicates that both variables change in the same direction. A negative correlation indicates that the variables change in opposite directions. A zero correlation signifies there's no association between the variables.

Price and quality exist positively correlated. The price of a product stands as a good indicator of its quality. You always have to spend a bit more for the best. The marketing literature has managed the usage of price as a surrogate for quality as a decision-making heuristic. That exists; the higher the price, the higher the quality.

Therefore, a drastic fall in the price of a necklace shows a drastic fall in its quality.

To learn more about positive correlation refer to:

brainly.com/question/17104826

#SPJ4

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1 year ago
If the fair value of a debt investment that is classified as an available-for-sale investment declines for a reason that is view
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Explanation: The fair value of the debt is simply its value if you adjust the price of the debt so that a buyer would be earning the market rate of interest. If the fair value of a debt investment that is classified as an available-for-sale investment declines for a reason that is viewed as "other than temporary" because the company has incurred a credit loss on the investment then the investment is written down to fair value, and only the credit loss component of the impairment loss is recognized in net income.

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3 years ago
Which career would organize,train and support teachers and educational workers to help them provide better instruction?
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Instructional<span> coordinators </span>can provide<span> training for </span>teachers<span> in curriculum</span>
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