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Alecsey [184]
2 years ago
15

Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal

is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel, then the price per share of the Rearden immediately after the announcement will be closest to:
Business
1 answer:
Damm [24]2 years ago
4 0

Answer: $19.12

Explanation:

The price per share of the Rearden immediately after the announcement will be calculated as the addition of the current prices for the companies divided by the total number of shares after merger. This will be:

= (20 × 10) + (15 × 4) / (10 + 3.6)

= (200 + 60) / 13.6

= 260 / 13.6

= 19.12

The price per share is $19.12

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Technician A says a fleet shop is usually connected with either a business that runs multiple vehicles or with equipment that is
saw5 [17]

Answer:

Technician A says a fleet shop is usually connected with either a business that runs multiple vehicles or with equipment that is maintained and repaired in house.

5 0
3 years ago
During the 1990s, several airlines were on the brink of bankruptcy. These same airlines were giving away millions of dollars in
lara [203]

Answer:

Assuming that the elimination of frequent-flyer programs would have enabled the airlines to earn higher profits and remain in business, then it would be a purely good idea for the airlines to eliminate their frequent-flyer programs.

The big question is, how much did the frequent-flyer programs cost the airlines?  Would the cost-savings be sufficient to eliminate their bankruptcies?  It is a known-fact that the airlines that create such programs always recover the program costs by charging higher fares.

Explanation:

The issue of airlines going bankruptcy does not seem to stem from customer-loyalty programs like the frequent-flyer programs.  The root cause lies in operational and other costs that airline managements have not been able to control.

4 0
2 years ago
A.C. Tech Manufacturing Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information
Colt1911 [192]

Answer:

A.C. Tech Manufacturing Appliances

Product Models to produce first, if management incorporates a short-run profit-maximizing strategy:

                                                 Small      Medium     Large

Selling price                             $430       $610          $1,210

Variable cost                            $270       $280         $530

Contribution                            $160        $330         $680

Fixed Costs:

Fixed manufacturing                 $40         $170          $270

Fixed selling & admin                $70         $75            $140

Unit Profit                                   $50         $85            $270

Demand in units                         150         170              150

Total profit                               $7,500     $14,450      $40,500

Machine hours/unit                     60           60             150

Total machine hours required 9,000      10,200        22,500

Unit profit per machine hour   $0.83      $1.42         $1.80

If management incorporates a short-run profit maximizing strategy, given maximum machine hours available, it should first produce the large model.

Explanation:

The large model offers better contribution per unit, better profit per unit and in total, and most importantly better profit per unit of hour (major constraint).

In making a limiting factor decision, the choice goes to the product model that produces more profit under the limiting constraint.

5 0
3 years ago
Explain five (5) contributions of the manufacturing industry to industrialization​
Drupady [299]

Answer:

Line production system

Scale of production

Development of Factories

Development of Capital Machinery

Development of Capital Goods Industry.

Explanation:

Line production system: This system was adopted in manufacturing companies to divide the tasks between the workers so a product can be manufactured in the fastest way possible

Scale of production: The manufacturing industry develop high levels of production that allow surpluses of production of goods in the economy.

Development of Factories: The manufacturing industry was the first in organize the Plant for production purposes. Therefore, the creation of what is nowadays known as factories was a consequence of this organization.

Development of Capital Machinery: Manufacturers Researched and developed new machines to improve the times of production. With time this technology was used for more industries to achieve fast performances.

Development of Capital Goods Industry: As machines were developed the industry of Capital goods arose and became an important source of technology for companies.

3 0
3 years ago
Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 300,000 Beginning m
Gala2k [10]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Q=1000

Sales= $ 300,000

Beginning merchandise inventory= $20,000

Purchases= $200,000

Ending merchandise inventory= $7,000

Fixed selling expense= $ ?

Fixed administrative expense= $12,000

Variable selling expense= $15,000

Variable administrative expense= $ ?

Contribution margin= $60,000

Net operating income= $18,000

First, we have to calculate the variable administrative expense:

Contribution margin= sales - cost of goods sold - variable selling expense - variable administrative expense

60000= 300000 - (beginning inventory + purchase - ending inventory) - 15000 - variable administrative expense

variable administrative expense= 300000 - (20000+200000-7000)-15000-60000

variable administrative expense= $12000

Now, we can calculate the fixed selling expense:

Net operating income= contribution margin - fixed selling expense - fixed administrative expense

18000= 60000 - fixed selling expense - 12000

fixed selling expense= 60000-12000-18000

fixed selling expense= 30000

A)Sales= 300,000

Variable costs:

Cost of good sold= 213,000

Variable selling expense= 15,000

Variable administrative expense= 12,000

Total variable cost= 240,000

Contribution margin=$60,000

Fixed costs:

Fixed selling expense= 30,000

Fixed administrative expense= 12,000

Total fixed cost= $42,000

Net profit= $18,000

B) Revenue= 300,000

COGS= 213,000 (-)

Gross porfit= 87000

Selling expense= (30000+15000)= 45,000

Administrative expense= (12000+12000)= 24,000

EBITDA= 18,000

C) Selling price per unit= 300,000/1000= $300

D) Variable cost per unit= total variable cost/q= 240000/1000= $240

E) Contribution margin per unit= 60000/1000= $60

F) The contribution format income statement, because you can easily analyze the effect of each unit in the cost structure and net income.

6 0
3 years ago
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