This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: MegaToy Inc is considering acquiring Action Figures Inc, both publicly traded firms in the toy ... (Read 50 times)

Alainaaa8

  • Hero Member
  • *****
  • Posts: 576
on: Jul 11, 2018
MegaToy Inc is considering acquiring Action Figures Inc, both publicly traded firms in the toy industry. Action Figures is currently trading at 18 per share and has 15 million shares outstanding.
 
  The executive team at MegaToy believes that the present value of potential synergies is 70 million if the firms combine. What is the highest bid price per share that MegaToy should consider paying for Action Figure shares? What is the largest percentage premium over the current share price MegaToy would be willing to pay?

Question 2

A spider is an example of a broad market exchange-traded fund.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

k2629

  • Sr. Member
  • ****
  • Posts: 357
Reply #1 on: Jul 11, 2018
Answer to Question 1

The value of Action Figures to MegaToy = 18/share  15,000,000 shares + 70,000,000 = 340,000,000. The maximum value per share is Value/the number of shares = 340,000,000/15,000,000 = 22.67. This is a (22.67 - 18.00 )/(18.00 ) = 25.93 premium over the current market price.

Answer to Question 2

TRUE


Alainaaa8

  • Member
  • Posts: 576
Reply 2 on: Jul 11, 2018
Thanks for the timely response, appreciate it

kalskdjl1212

  • Member
  • Posts: 353
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Action of aldosterone on distal convoluted tubule epithelial cells. Action of aldosterone on distal convoluted tubule epithelial cells.
Mechanism of Action of Local Anesthetics Mechanism of Action of Local Anesthetics
Mechanism of Action of Antihypertensive Drugs Mechanism of Action of Antihypertensive Drugs
Mechanism of Action of Antiprostatic Drugs Mechanism of Action of Antiprostatic Drugs
Action of a type II topoisomerase Action of a type II topoisomerase
Mechanisms of Action of Diuretics Mechanisms of Action of Diuretics
Video: Carbohydrate Metabolism: Introduction to renal processes and filtrate formation and composition

For a complete list of videos, visit our video library