Homework Helper

Not Rated (0)

$17/per page/

About Homework Helper

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Accounting,Applied Sciences See all
Accounting,Applied Sciences,Art & Design,Chemistry,Economics,Essay writing Hide all
Teaching Since: Apr 2017
Last Sign in: 418 Weeks Ago, 6 Days Ago
Questions Answered: 3232
Tutorials Posted: 3232

Education

  • MBA,MCS,M.phil
    Devry University
    Jan-2008 - Jan-2011

  • MBA,MCS,M.Phil
    Devry University
    Feb-2000 - Jan-2004

Experience

  • Regional Manager
    Abercrombie & Fitch.
    Mar-2005 - Nov-2010

  • Regional Manager
    Abercrombie & Fitch.
    Jan-2005 - Jan-2008

Category > Business & Finance Posted 20 Jun 2017 My Price 12.00

Sweet Cola Corp. (SCC) is bidding to take over Salty Dog Pretzels

Sweet Cola Corp. (SCC) is bidding to take over Salty Dog Pretzels (SDP). SCC has 3,000 shares outstanding, selling at $50 per share. SDP has 2,000 shares outstanding, selling at $17.50 a share. SCC estimates the economic gain from the merger to be $15,000.

 

a.

If SDP can be acquired for $20 a share, what is the NPV of the merger to SCC?

 

  NPV $   

 

b-1.

What will SCC sell for when the market learns that it plans to acquire SDP for $20 a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

  Selling price $   

 

b-2. What will SDP sell for?

 

  Selling price $   

 

b-3.

What are the percentage gains to the shareholders of each firm? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

 

  Gains         
  SCC %  
  SDP %  
 

 

c.

Now suppose that the merger takes place through an exchange of stock. On the basis of the premerger prices of the firms, SCC sells for $50, so instead of paying $20 cash, SCC issues .40 of its shares for every SDP share acquired. What will be the price of the merged firm? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

  Price $   

 

d.

What is the NPV of the merger to SCC when it uses an exchange of stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

  NPV $

Answers

Homework Helper
Not Rated (0)
Status NEW Posted 20 Jun 2017 06:06 AM My Price 12.00

Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k Y-----------ou -----------for----------- us-----------ing----------- ou-----------r w-----------ebs-----------ite----------- an-----------d a-----------cqu-----------isi-----------tio-----------n o-----------f m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l

Not Rated(0)