Favorite Food Systems Inc. Favorite Food Systems Inc. which was founded by John Favorite in 1994, is a West Coast chain with current annual sales of approximately $75 million. In 2003, the company went public. (The Favorite family now controls about 57 percent of the common stock.)
Hi. I need help with the following question please.
One company that the analysis indicated as potentially suitable for acquisition by Admiral is
Favorite Food Systems Inc. Favorite Food Systems Inc. which was founded by John Favorite in 1994, is a West
Coast chain with current annual sales of approximately $75 million. In 2003, the company went public.
(The Favorite family now controls about 57 percent of the common stock.)
1. The merger will generate $1.0 million in after tax earnings each year from synergies. Calculate the
2. Develop the terminal year value of the synergies based on the fifth year of the cash flows. Assume the growth rate of the synergistic cash flows after the terminal year is 1.0%
3. Calculate the Admiral Foods post-merger income statement and earnings per share, assuming an exchange ratio of 0.45.
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