2 A market that has three firms with the following market shares:Firm A =Firm B =Firm C =35%41%24%Suppose firm B wants to acquire firm C so that the post-acquisition market would exhibitthe following shares:B+C = 65%A = 35%a-1. What is the pre- and postmerger HHI and the change in the HHI resulting from themerger?Premerger HHIPostmerger HHIChange in theHHIa-2. Based on your above calculation and according to department of Justice guidelines,is this merger likely to be challenged?Yes(Click to select)O No

A merger is a business agreement in which it is decided that two companies will operate as one and…

Answered: A market that has three firms with the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following techniques allow firms to gain market access in a new market? Select one: a. buyback b. All of the answers c. offset d. switch trading
Suppose that in April 2019, Nike Inc. had sales of $36,403 million, EBITDA of $5,214 million, excess cash of $5,245 million, $3,818 million of debt, and 1,583.3 million shares outstanding. a. Using the average enterprise value to sales multiple in the table here,, estimate Nike's share price. b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above? c. Using the average enterprise value to EBITDA multiple in the table above, estimate Nike's share price. d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above? a. Using the average enterprise value to sales multiple in the table above, estimate Nike's share price. Nike's share price using the average enterprise value to sales multiple will be $ (Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples…
Please help me prove this question: Show that for a European put on a stock which pays continuous dividends, P(S,t)=Ker(T-t)N(-d*2)-Se-q (T-t)N(-d*1). Here d*1 and d*2 are the usual d1 and d2 but with r replaced by r-q.
Consider a perpetual preferred share paying a fixed dividend. What will happen to the market value of the share if the dividend yield rate decreases? The market value will decrease. CThe market value will increase. O The market value will remain the same.
The market's reaction to the announcement of a change in the firm's dividend payout is referred to as the:Question 25Answer A. information content effect. B. MM Proposition II. C. MM Proposition I. D. efficient markets hypothesis.
Assume that Ford and GM are indentical firms. Using the comparable company analysis, which one would appear to be a better stock buy? Firm P/E Ratio Ford 5.2 GM 8.3 a) Ford b) GM
The value of an ordinary share Select one or more: a. Will fall if future profit forecasts are higher than expected b. Is always at its fundamental value c. Can rise and fall along with market sentiment d. Will rise if a firm introduces some cost saving innovation
(a) Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread: Purchase 1 call with exercise price a Sell 2 calls with exercise price (atb)/2 Purchase 1 call with exercise price b as a function of the underlying stock price S at t=1 where a=120and b=140. (b) An individual agent thinks that there is a high probability that the Dow Jones will have a payoff (or points) between a=32,000 and b=36,000 at t=1. Design a digital option (see Figure 1) as a sequence of calls on the Dow that converges to a pure bet on getting $1 on the interval [32,000, 36,000], i.e. if the Dow lies between Se[32,000, 36,000] at t=1, then the portfolio of calls pays off exactly $1. The payoff is O otherwise. Figure I (Digital option) payoff a-32,000 b-36,000 Hint: You have to modify the sell strategies of a bull butterfly spread to obtain a payoff as given in Figure 2 and then adjust n and õ appropriately. Figure 2 payoff of portfolio 1-nő a b-8
QUestion-based on, "per share market price". I have tried it but confused about what to do.
Using the cost of new common stock, the firm's WACC is?
2. a) Using put-call parity and bounds on a European call, or otherwise, show that the price of a European put on a stock paying no dividends satisfies max{0, KZ(t, T) − St} ≤ PK(t, T) ≤ KZ(t, T).
Tick all those statements on options that are correct (and don't tick those statements that are incorrect). O a. The Black-Scholes formula is based on the assumption that the share price follows a geometric Brownian motion. Ob. The put-call parity formula necessarily requires the assumption that the share price follows a geometric Brownain motion. 0 C. If interest is compounded continuously then the put-call parity formula is P+ S(0) = C + Ke where I is the expiry time. Od. In general the equation S(T) + (K − S(T))+ (S(T) — K)† + K is valid. An American put option should never be exercised before the expiry time. e. =

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