1) 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. Assume 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.
1) Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and...
1) 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. Assume Rearden offers an exchange ratio such that, at current pre-announcement share prices...
Your company has earnings per share of $5. It has 1 million shares outstanding, each of which has a price of $44. You are thinking of buying TargetCo, which has earnings per share of $2, 1 million shares outstanding, and a price per share of $29. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offer an exchange ratio such that, at current pre-announcement share prices for both firms, the...
Your company has earnings per share of $5. It has 1 million shares outstanding, each of which has a price of $42. You are thinking of buying TargetCo, which has earnings of $1 per share, 1 million shares outstanding, and a price per share of $26. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offered an exchange ratio such that, at current pre-announcement share prices for both firms, the...
pany has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $38. You are thinking of buying TargetCo, which has earnings of $1 per share, 1 million shares outstanding and a price per share of $21. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offered an exchange ratio such that, at current p share prices for both firms, the offer...
Your company has earnings per share of $8. It has 1 million shares outstanding, each of which has a price of $60. You are thinking of buying TargetCo, which has earnings per share of $4, 1 million shares outstanding, and a price per share of $45. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Complete parts a through d below. a. If you pay no premium to buy TargetCo, what will...
Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. You are thinking of buying TargetCo, which has earnings per share of $2,1 million shares outstanding, and a price per share of $25. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will be your earnings per share after the...
Question 9(10 points). Martin Manufacturing has earnings per share (EPS) of $3.00, 5 million shares outstanding, and a share price of $32. Martin is considering buying Luther Industries, which has earnings per share of $2.50, 2 million shares outstanding, and a share price of $20. Martin will pay for Luther by issuing new shares. There are no expected synergies from the transaction. a)lf Martin pays no premium to acquire Luther, what will the carnings per share be after the merger?...
just need part d please show equations
Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. You are thinking of buying TargetCo, which has earnings per share of $2,1 million shares outstanding, and a price per share of $25. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will...
KD Industries has 30 million shares outstanding with a market price of $20 per share and no debt. KD has had consistently stable earnings, and pays a 21% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. If KD expects the share price to increase from $20 per share to a new share price on announcement of the transaction and before...
Firm XY is planning on merging with Firm YZ. Firm XY will pay Firm YZ's shareholders the current value of their shares in shares of Firm XY. Firm XY currently has 39 000 shares outstanding at a market price of R40 a share. Firm YZ has 22 000 shares outstanding at a price of R17 a share. The after-merger earnings will be R78 000.What will the earnings per share be after the merger?