a)
To calculate: The EPS (Earnings per Share) of Firm A after a merger
Introduction:
The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.
b)
To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.
Introduction:
The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.
c)
To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.
Introduction:
The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.
d)
To calculate: The share price of Firm A after the merger, and the price-earnings ratio.
Introduction:
The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.
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Fundamentals of Corporate Finance
- Financial Management Question. QUESTION ONE You are provided with the following information relating to V ltd Equity and liabilities 12% debentures (shs1000 at par) 16,000 10% preferences shares 6,250 Ordinary shares (Shs 10 par) 12,500 Retained earnings 28,125 Additional information The debentures are currently selling at Shs 950 in the market Company paid a dividend of Shs 5.00 per ordinary share and they are expected to grow at a rate of 10% per annum. The corporation tax is 40% Required Effective Cost of debt Cost of equity Weighted Average cost of capitalarrow_forwardSuppose IWT has decided to distribute $50 million, which it presently is holding in liquid short-term investments. IWT’s value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding. Assume that IWT has not yet made the distribution. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT’s intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?arrow_forward51. What is the amount of dividend per share that MOONSTONE paid on March 31, 2021? 1.50 0.85 1.59 1.70 No answer from the given choices. 52. How much is the ordinary share capital, December 31, 2021? 24,531,000 24,498,800 18,870,000 17,000,000 No answer from the given choices. 53. How much will is the total cash dividends paid during the year 2021? 9,000,000 6,750,000 12,399,900 12,439,800 No answer from the given choices. 54. Number of fractional warrants outstanding as of December 31, 2021 66,100 13,220 52,880 0 No answer from the given choices. 55. How much is the retained earnings appropriated for contingency loss? 300,000 200,000 250,000arrow_forward
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