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Jlenok [28]
3 years ago
14

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms ha

ve no debt outstanding. Firm B Firm T Shares outstanding 4,600 1,000 Price per share $ 40 $ 14 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,800. Firm T can be acquired for $16 per share in cash or by exchange of stock wherein B offers one of its share for every two of T's shares. Are the shareholders of Firm T better off with the cash offer or the stock offer
Business
1 answer:
Alborosie3 years ago
8 0

Answer:

The answer is "Share offer is better".

Explanation:

Firstly Computing the value of the combined company:

The merger value = the market value of the B company + the market value of the T + synergically advantages

= shares issued * share price of company B + outstanding shares * price per share of company T + benefits for synergies

=4,600 \times \$40+1,000\times \$14+\$8,800\\\\=\$206,800\\\\

Number of new shares which have been created following the merger = the number of shares in the T *exchange ratio

=1000 \times \frac{1}{2}\\\\=500 \ shares\\\\

The percentage price of the fusion company = the value of the fusion company /the share value of the fusion company

The per-share price of the combined company=\frac{\$206,800}{4,600+500}=\frac{\$206,800}{5,100}=\$40.55

The cash offer value = 16 dollars per share

Stock offer value = price of merged company share /2 = \frac{\$40.55}{2}=\$20.27 / \ share\\\\

Thus, share offer is better

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Explanation:

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Then depreciation charges for the first quarter are calculated as follows:

Depreciation expense Office equipment = 800 – 400 = 400

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Since there are 4 quarters in an accounting year, the depreciation charge in 2018 is calculated as follows:

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The answer to this question can be described as follows:

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3 0
3 years ago
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Thepotemich [5.8K]

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The correct answer is c. invite suppliers to bid on supplying what is requested.

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B2B sales require special attention due to the profile of your buyer.

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The B2B buyer chooses companies that allow the creation of strong business relationships, with a guarantee of supply and deadlines.

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3 years ago
LO 3.4If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-e
kompoz [17]

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