Company A Acquires Company B at $9 per share Company B; Trading at $5, 1,000,000 outstanding shares Company A synergies of $6,000,000 from acquisition FInd Max price Company A should Pay for Company B
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Company A Acquires Company B at $9 per share
Company B; Trading at $5, 1,000,000 outstanding shares
Company A synergies of $6,000,000 from acquisition
FInd Max price Company A should Pay for Company B
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- XX acquires 80% of the share capital of LL on 1 August 2020 and is preparing its group financial statements for the year ended 31 December 2020. How will LL’s results be included in the group statement of profit or loss? A. 100% of LL’s revenue and expenses for the period ended 1 August 2020 to 31 December 2020 B. 80% of LL’s revenue and expenses for the year ended 31 December 2020 C. 100% of LL’s revenue and expenses for the year ended 31 December 2020 D. 80% of LL’s revenue and expenses for the period 1 August 2020 to 31 December 2020Assume that Company A acquires 70 per cent of Company B for a cash price of $14 million when the share capital and reserves of Company B are: Share capital$8 millionRetained earnings$2 million $10 millionPass the necessary consolidation journal entries and the journal entries to record the non-controlling interest if the non-controlling interest in the acquirer is measured at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assetsAcquisition of Company B by Company A (stock or asset acquisition) Company A is about to acquire 100% of company B. Company B has identifiable net assets with book value of $300,000 and $500,000 respectively. As payment Company A will issue common stock with a fair value of $75,000. How should the transaction be recorded if the acquisition is? a) An acquisition of net assets? b) An acquisition of Company B’s common stock and Company B remains a separate legal entity
- Assume that Company A acquires 70 per cent of Company B for a cash price of $14 million when the share capital and reserves of Company B are: Share capital $8 million Retained earnings $2 million $10 million. A)Pass the necessary consolidation journal entries and the journal entries to record the non-controlling interest if the non-controlling interest in the acquirer is measured at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. b) What are some of the implications of allowing the group to have two options in accounting for goodwill on consolidation?You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt $3,562 Target Cash and Cash Equivalents $5,147 % Debt Financing 40% % Equity Financing 60% Equity Financing Fees 4.0% Debt Financing Fees 1.5% Other Transaction Costs $800Consider the following information about Firm A and Firm T: Item Firm A (Acquiring firm) Firm T (Target firm) Price per share $20 $15 Outstanding shares 50 25 Total market value $1000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the merger premium? Select one: a. $150.00 b. $135.00 c. $125.00 d. $175.00
- Company A Acquires Company B Synergy benefits = $600 Mill Offer to company B shareholders: Company A gives 5 shares for 3 of company B shares Company A shares = $25 for 110mill outstanding Company B Shares = $30 for 60mill outstanding Value of combined company?The market values of Alpha Corporation and Gamma Corporation are $2,500 and $900, respectively. Assume Alpha acquires Gamma at a cost of $1,000 and the transaction creates $100 in synergy. What would be the NPV of this acquisition to Alpha? Multiple Choice $0 $150 $50 $100 $125If CARDO Co purchases the net assets of SYANO Co by issuing 5,000 shares of their P20 par valueshares with a fair value of P40 per share, incurs a mortgage loan for P90,000, pays P150,000 cash andpaying direct, indirect and stock issue costs of P75,000, P50,000 and P40,000 respective. REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisition
- Consider the following information about Firm A and Firm T: Item Firm A (Aquiring Firm Firm T (Target Firm Price/share $20 $15 Outstanidng shares 50 25 Total market value $1,000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the merger premium? Select one: a. $135.00 b. $125.00 c. $175.00 d. $150.00C-Corporation A acquires C-Corporation B in a taxable stock acquisition. In the process of completing the transaction, A incurs $27 million of transaction costs, consisting of the following: 15 $5 million pre-brightline due diligence $10 million post-brightline due diligence $12 million inherently facilitative costs How much can A deduct and how much must A capitalize? a. Deduct $5 million; capitalize $22 million b. Deduct $15 million; capitalize $12 million c. Deduct all; capitalize none d. Deduct none; capitalize allFirm B Firm A $ Firm AB Price Per Share Total Earnings (millions) Shares Outstanding (millions of shares) Total Value (millions) 75 $ 40 $ 300 $ 200 200 60 $ 15,000 $ 2,400 $ 20,000 Firm A has proposed to acquire Firm B at a price of $65 per share for Firm B's stock. a) What is the NPV of the merger to Firm A? What is the NPV of the merger to Firm B? b) What will be the post-merger price per share for Firm A's stock if Firm A pays in cash? c) To make the value of a stock offer equivalent to a cash offer of $3,900 million, how many shares should Firm A give to the owners of Firm B?