In the fall of 2009, Kraft Foods attempted to buy Cadbury plc. Data for each of...
In the fall of 2009, Kraft Foods attempted to buy Cadbury plc. Data for each of the two companies are given in the table. Both companies are all equity financed. The CEO of Kraft Foods estimated that merger synergies had a present value of $5 billion. Kraft offered each Cadbury shareholder 0.5141 shares in Kraft. Use the data in the table to answer the questions below. Kraft Cadbury Value of Firm Shares Outstanding Stock Price $47B 1.65B $28.48 $13B 0.96B...
In the fall of 2009, Kraft Foods attempted to buy Cadbury plc. Data for each of the two companies are given in the table. Both companies are all equity financed. The CEO of Kraft Foods estimated that merger synergies had a present value of $14 billion. Kraft offered each Cadbury shareholder 0.7753 sharess in Kraft. Use the data in the table to answer the questions below Kraft Cadbury $45B Value of Firm $18B Shares Outstanding 1.27B 1.01B Stock Price $35.43...
In the fall of 2009, Kraft Foods attempted to buy Cadbury plc. Data for each of the two companies are given in the table. Both companies are all equity financed. The CEO of Kraft Foods estimated that merger synergies had a present value of $12 billion. Kraft offered each Cadbury shareholder $24.049 cash. Answer the questions below using the data in the table. Kraft Value of Firm Shares Outstanding Stock Price $50B 1.34B $37.31 Cadbury $15B 1.08B $13.89 Part A....
Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B Firm T Shares outstanding 4,800 1,800 Price per share $ 47 $ 20 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $9,100. a. If Firm T is willing to be acquired for $22 per share in cash, what is the NPV of the merger? (Do...
Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B & Firm T Shares outstanding 5,400 & 2,000. Price per share $ 44 & $ 18 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $9,200. a. If Firm T is willing to be acquired for $20 per share in cash, what is the NPV of...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Question Help EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table, Henry Company is considering merging with Mayer by swapping 1.57 shares of its stock for each share of Mayer stock Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging a. Calculate the ratio of exchange in market price b. Calculate the eamings per share (EPS) and pricelearnings (PIE) ratio for each...
The Jeter Corporation is considering acquiring the A-Rod Corporation. The data for the two companies are as follows: A-Rod Corp. Jeter Corp. Total earnings $ 708,000 $ 3,900,000 Number of shares of stock outstanding 295,000 1,950,000 Earnings per share $ 2.40 $ 2.00 Price-earnings ratio (P/E) 20 24 Market price per share $ 48 $ 48 a. The Jeter Corp. is going to give A-Rod Corp. a 50 percent premium over A-Rod’s current market value. What price will it pay?...
The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation. Information about each firm is given here: Bread Butter Price-earnings ratio 16 33 Shares outstanding 96,000 330,000 Earnings $ 190,000 $ 950,000 Bread's shareholders will receive one share of Butter stock for every three shares they hold in Bread. a-1. What will the EPS of Butter be after the merger? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g.,...
The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here: Flannery Stultz Price–earnings ratio 12 36 Shares outstanding 90,000 360,000 Earnings $ 220,000 $ 880,000 Flannery’s shareholders will receive one share of Stultz stock for every three shares they hold in Flannery. a-1. What will the EPS of Stultz be after the merger? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g.,...