ABC Corporation will be acquiring XYZ Corporation. The latter's fair value has not yet beendetermined. ABC would be valuing it using relative valuation based on three of itscompetitors using the price earnings ratio. Relevant information are as follows:Red Inc.Blue Company3,000,000.00460,000.00Equity Market ValueEarnings2,500,000.00380,000.00Yellow Corp.2,800,000.00410,000.00ABC foresees that upon the acquisition, XYZ will increase its current annual earnings ofP360,000 by 25%. What is the value of control over XYZ from the point of view of ABC?

In the context of the given question, we need to determine the value of control over XYZ company…

ABC Corporation will be acquiring XYZ Corporation. The latter's fair value has not yet been determined. ABC would be valuing it using relative valuation based on three of its competitors using the price earnings ratio. Relevant information are as follows: Red Inc. Blue Company Yellow Corp. Equity Market Value ℗ 3,000,000.00 460,000.00 Earnings ABC foresees that upon the acquisition, XYZ will increase its current annual earnings of P360,000 by 25%. What is the value of control over XYZ from the point of view of ABC? 2,500,000.00 P 380,000.00 2,800,000.00 410,000.00

ABC Corporation will be acquiring XYZ Corporation. The latter's fair value has not yet been determined. ABC would be valuing it using relative valuation based on three of its competitors using the price earnings ratio. Relevant information are as follows: Red Inc. Blue Company Yellow Corp. Equity Market Value ℗ 3,000,000.00 460,000.00 Earnings ABC foresees that upon the acquisition, XYZ will increase its current annual earnings of P360,000 by 25%. What is the value of control over XYZ from the point of view of ABC? 2,500,000.00 P 380,000.00 2,800,000.00 410,000.00

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 5P

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