1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Novosadov [1.4K]
3 years ago
11

Firm Yahoo has attracted the attention of Firm Verizon because of its poor operating performance. Firm Verizon believes that the

way Firm Yahoo is managed is inefficient and that replacing the current management team would increase the cash flow of Yahoo by $25,000 every year up to perpetuity. Firm Yahoo has 50,000 shares outstanding and is not listed. Firm Verizon has 250,000 shares outstanding that are currently trading at $40/share. Firm Verizon already owns a 1% stake in Firm Yahoo. Firm Yahoo has two other shareholders, ABC and DEF. Both of them hold a 49.5% stake in Firm Yahoo. To change the management team, Firm Verizon needs to get control of Firm Yahoo (i.e., at least 50% of shares). Firm Verizon hires Levan Brothers, a prestigious investment bank, to get advice on the transaction. Levan Brothers estimates that the value of one share of Firm Yahoo under the current management team is $15 per share. They also advise Firm Verizon to pay a premium for the acquisition of Yahoo and to offer ABC and DEF $17 in cash for every share of Firm Yahoo. Fees charged by Levan Brothers to Firm Verizon are $6,000. Assume that there are no taxes and markets are perfectly efficient. The appropriate annual discount rate is 10%. (Note that Investment bankers usually receive a success fee, i.e., they are paid only if the transaction takes place i.e. their fees are NOT a sunk cost and the fee is typically paid by the acquiring firm.)
a) Compute the maximum price per share that Firm Verizon is willing to pay to acquire the remaining 99% of Firm Yahoo via an all-cash offer.

b) Compute ABC’s gains if it accepts the all-cash offer of $17/share.

c) ABC believes that DEF will accept the offer and tender its shares. What is the optimal strategy for ABC: accept the offer or decline the offer? Show your answer.

d) What will happen if DEF also believes that ABC will tender its shares? What is the minimum share price Firm Verizon should offer to ABC and/or DEF to avoid that?

e) Compute the gains or losses per share for Firm Verizon if an all-cash offer to acquire 99% of Firm Yahoo is made at a price of $20.

f) Under the assumption that ABC always believes that DEF will accept the cash offer (and vice versa), what is the likelihood that the inefficient management team is replaced some day? Explain.
Business
1 answer:
hichkok12 [17]3 years ago
7 0

Answer:

The answer is D

Explanation:

You might be interested in
Subway, the sandwich shop, is run by Jim, Tim and Kim. When a customer arrives, Jim spends 5 minutes taking order from the custo
Marizza181 [45]

Answer:

22 minutes minimum time

Explanation:

In the given scenario Subway sandwich shop has given its processes and time of each process.

We are to calculate the minimum time it will take to process a order. So we add all the times

Below is breakdown of the process time

Jim take orders 5 minutes

Tim prepares bread and Kim prepares filling for the order 7 - 10 minutes. We use 7 minutes since we are looking for minimum time.

Jim then assembles the bread 5 minutes

Time delivers order and takes payment 5 minutes

Total time = 5 + 7 + 5 + 5 = 22 minuites

6 0
3 years ago
At the beginning of the year, Carson Company reported total current assets of $658,000 and total assets of $2,450,000. Carson re
ehidna [41]

Answer:

Total Asset Turnover: 2.2857

Explanation:

                           <u>Total Assets</u>    

       

Begininng Balance           2,450,000        

       

Ending Balance              2,800,000          

       

Period activity                      350,000    

       

<u>Sales:</u> 6,000,000      

       

<em><u>Total Asset Turnover</u></em>:          <u>         </u><em><u> Sales   </u></em>

<em>                                               Average Total Assets</em>

<u>                  6,000,000               </u>

( 2,450,000 + 2,800,000 )  / 2

=

<u>6,000,000</u>

2,625,000

=

<u>2.2857</u>

4 0
3 years ago
If you invest $5,000 at the beginning of each month, howmany months will it take for your account to grow to $250,000
mr Goodwill [35]

Answer:

50 Months

Explanation:

If there is no compound interest it would be 50 Months. You would divide 250,000 by 5,000 to get the months.

5 0
2 years ago
Jason Thompson purchase an office building 10 years ago for $780,000. The building was just appraisal $1.25 million. What value
Kamila [148]

Answer:

No adjustment in records can be made until the asset is sold.

Explanation:

This is an example of cost concept. Assets are generally recorded at cost and remain on the accounting records at cost until they are disposed of. Future economic condition may change this appraised value, and therefore no adjustment in records can be made until the asset is sold.

8 0
3 years ago
Transformational leadership is a positive predictor of job performance and organizational commitment.
Taya2010 [7]

Answer:

a. True

Explanation:

Transformational leadership can be understood as a leadership style whose main objective is the motivation of employees. The transformational leader is the one who seeks to inspire employees through their own example and willingness to work, is the leader who assertively communicates with his team, seeking the autonomy of employees, building a relationship based on trust and increasing of creativity and organizational innovation.

This leadership style is a positive indicator of organizational performance and commitment because it is based on strengthening the organizational culture, where each employee has the possibility to contribute with innovative ideas in favor of the organization's objectives and goals, which creates a sense of greater appreciation and job satisfaction, greater motivation that increases the employee's creativity and productivity.

4 0
2 years ago
Other questions:
  • Consider a monopolist currently selling output Q to two different markets: Market A and Market B. This monopolist is able to pri
    6·1 answer
  • Shamrock Shades operates in mall kiosks throughout the southwestern U.S. Shamrock purchases sunglasses from bulk discounters and
    13·1 answer
  • Other factors that should be considered before the final decision is made​ are: ​(Choose all that​ apply.) A. What will be the e
    10·1 answer
  • When considering the quick service restaurant competition it would be most important for Wendy's to consider not only the offeri
    9·1 answer
  • Legal obligations that carry punishments, if not followed, are ____?
    12·1 answer
  • Bentley estimates manufacturing overhead of $3,251,600 for 2013 and will apply overhead to units produced based on 739,000 machi
    11·1 answer
  • It will not let me see the answers so this is garbo sorry for the rude comment it is just that this will not show me the answer.
    9·2 answers
  • If a firm decides to increase the depth of its offerings to address consumer preferences, what will it do
    13·1 answer
  • Marking brainliest! What is an example of a public corporation?
    13·2 answers
  • Which method for counting gross domestic product focuses on the money paid for all the factors of production as well as profits
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!