Business, 12.08.2020 08:01 rainbowsauxe

Velcro saddles is contemplating the acquisition of pogo ski sticks, inc. the values of the two companies as separate entities are $20 million and $10 million, respectively. velcro saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $500,000 per year in perpetuity. velcro saddles can either pay $14 million cash for pogo or offer pogo a 50% holding in the combined company. the opportunity cost of capital is 10%. a. What is the value of the stock in the merged company held by the original Pogo shareholders? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
Value of the stock $ million
b. What is the cost of the stock alternative? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
Cost of the stock $ million
c. What is its NPV under the stock offer? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
NPV $ million

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 16:00

Jodi is trying to save money for a down payment on a house. she invests $6,000 into an account paying 5.5% simple interest. for how long must she save if she needs $7,300 for the down payment? a. 2 years b. 3 years c. 4 years d. 5 years

Answers: 1

Answer

Business, 22.06.2019 08:30

Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk

Answers: 3

Answer

Business, 22.06.2019 11:30

Mark knopf is an auditor who has been asked to provide an audit and financial statement certification for a company that is going public on the new york stock exchange. knopf wants to know his personal liability if the company provides him with inaccurate or false information. which of the following sources of law will him answer that question? a. the city ordinances where the company headquarters is located. b. the state constitution of the state where the company is incorporated. c. code of federal regulations. d. all of the above

Answers: 1

Answer

Business, 22.06.2019 17:50

Abc factory produces 24,000 units. the cost sheet gives the following information: direct materials rs. 1,20,000direct labour rs. 84,000variable overheads rs. 48,000semi variable overheads rs. 28,000fixed overheads rs. 80,000total cost rs. 3,60,000presently the product is sold at rs. 20 per unit.the management proposes to increase the production by 3,000 units for sales in the foreign market . it is estimated that semi variable overheads will increase by rs. 1,000. but the product will be sold at rs. 14 per unit in the foreign market. however, no additional capital expenditure will be incurredq-1. what is present profit of the company ? q-2. what is proposed profit of the company in new market? q-3.what is suggestion for new makret proposal whether proposal accept or not

Answers: 1

Answer

You know the right answer?

Velcro saddles is contemplating the acquisition of pogo ski sticks, inc. the values of the two compa...

Questions