The Sweet Shoppe and Candy Land are all-equity firms. The Sweet Shoppe has 500 shares outstanding at a market price of $96 a share. Candy Land has 2,700 shares outstanding at a price of $24 a share. The Sweet Shoppe is acquiring Candy Land for $62,000 in cash. The incremental value of the acquisition is $3,600. What is the net present value of acquiring Candy Land to The Sweet Shoppe?
NPV = (2,700 × $24) + $3,600 - $62,000 = $6,400
|
65.
|
Sleep Tight is acquiring Restful Inns for $52,500 in cash. Sleep Tight has 3,000 shares of stock outstanding at a market price of $38 a share. Restful Inns has 2,100 shares of stock outstanding at a market price of $24 a share. Neither firm has any debt. The incremental value of the acquisition is $1,700. What is the price per share of Sleep Tight after the acquisition?
Price per share = [(3,000 × $38) + (2,100 × $24) + $1,700 - $52,500]/3,000 = $37.87
|
66.
|
Outdoor Living has agreed to be acquired by New Adventures for $48,000 worth of New Adventures stock. New Adventures currently has 8,000 shares of stock outstanding at a price of $32 a share. Outdoor Living has 1,700 shares outstanding at a price of $43 a share. The incremental value of the acquisition is $21,000. What is the value of the merged firm?
Value of merged firm = (8,000 × $32) + (1,700 × $43) + $21,000 = $350,100
|
67.
|
Moore Industries has agreed to be acquired by Scott Enterprises for $22,000 worth of Scott Enterprises stock. Scott Enterprises currently has 7,500 shares of stock outstanding at a price of $28 a share. Moore Industries has 1,800 shares outstanding at a price of $12 a share. The incremental value of the acquisition is $1,100. What is the value per share of Scott Enterprises stock after the acquisition?
Value per share = [(7,500 × $28) + (1,800 × $12) + $1,100]/[7,500 + ($22,000/28)] = $28.08
|
No comments:
Post a Comment