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?
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- Suppose that an acquirer decides to pay a 25% premium to buy Uber. The book value of Uber’s net assets is $6.7 million. The fair value of Uber’s net assets is estimated at $7 million. What amount of goodwill will be recorded in this acquisition? Question 14Answer a. $75,000 b. $8,750,000 c. $1,675,000 d. $1,750,000Firm A acquires firm B when firm B has a book value of assets of $345 million and a book value of liabilities of $130 million. Firm A actually pays $365 million for firm B. This purchase would result in goodwill for firm A equal to. Multiple Choice $215 million $365 million $150 million Help Save & Exit $345 million Sst 12 n3 K RiverRacks (where WACC is 11.4%) is considering an acquisition of Ratt Adventures (whose WACC is 15.1%) What is the appropriate discount rate RiverRacks to use to evaluate the acquisition? Why? The appropriate discount rate for RiverRocks to use to evaluate the acquisition is % (Round to one decimal place.) Why? (Select the best choice below) OA. Rat Adventures WACC is the most appropriate discount rate to account for the rok of Raft Adventures cash flows OB RverRacks WACC is the most appropriate discount rate to account for Rat Adventures cash flows OC. An average WACC from RiverRocks and Rat Adventures will best account for the risk of Raft Adventures cash flows. OD. The risk-tee rate will best account for the risk of Raft Adventures' cash flows since RiverRocks will pay cash for the transaction
- Consider 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 NPV of the acquisition to firm A? Select one: a. $1075.00 b. $575.00 c. $425.00 d. $555.00Suppose Speedy Delivery pays $62 million to buy Lone Star Overnight. The fair valueof Lone Star’s assets is $80 million, and the fair value of its liabilities is $24 million. How muchgoodwill did Speedy Delivery purchase in its acquisition of Lone Star Overnight?a. $42 millionb. $24 millionc. $38 milliond. $6 millionFirm A acquires firm B when firm B has a book value of assets of $315 million and a book value of liabilities of $115 million. Firm A actually pays $335 million for firm B. This purchase would result in goodwill for firm A equal to. Multiple Choice $335 million O $315 million $200 million $135 million
- 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. $150.00Consider 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. $175.00Do solve both parts Question 9 a) Company A has a present value of £78 million and Company B has a present value of £14 million. Merging the two would enable cost savings with a present value of £5 million. Company A acquires 100% of shares in Company B for £18 million. What do Company B’s shareholders gain from this acquisition? b) Deepings Company has a P/E ratio of 9.6 and a share price of £1.52. What are the earnings per share of the company?
- How would QuickPick divide a $145,000 lump-sum purchase price for land, building, and equipment with estimated market values of $56,100, $78,200, and $35,700, respectively? (Round interim calculations to the nearest tenth of a percent, X.X%, and your final answers to the nearest whole dollar.) Estimated Market Cost of Value Each Asset Land. . . . . . . . . . . . $56,100 Building. . . . . . . . . . $78,200 Equipment. . . . . . . . $35,700 Total $170,000AC Energy Corp. would like to acquire an additional subsidiary involved in renewable energy. Information about the top four potential acquirees were gathered. You would like to decide which entity to acquire based Uno Dos Tres Quatro Market Value of Equity Net Operating Income - 2021 10,000,000 P 10,200,000 P 9,750,000 P 10,500,000 1st Quarter 510,000.0 P 505,000.0 P 480,000.0 P 550,000.0 2nd Quarter 530,000.0 525,000.0 P 450,000.0 P 530,000.0 Annual Operating Income 2,000,000.0 P 2,040,000.0 P 1,890,000.0 P 2,270,000.0 Net Operating Income - 2022 1st Quarter 500,000 520,000 490,000 550,000 2nd Quarter 490,000 510,000 500,000 570,000 istribut 370,000 Net Income - 2021 1st Quarter 335,000 345,000 445,000 CELE 2nd Quarter 390,000 355,000 315,000 425,000 Annual Net Income 1,440,000 1,360,000 1,350,000 1,850,000 Net Income - 2022 1st Quarter 360,000 350,000 355,000o 445,000 2nd Quarter 350,000 340,000 365,000 465,000 Provide the under/(over) valuation of the entity to be acquired.20 If net assets in fair value for company B is 450000 JD, what price should company A pay to achieve bargain gain of 25000 JD. Select one: a. 430000 b. 435000 c. 425000 d. 420000
