Consider the following premerger information about a bidding firm (Firm B) and a targetfirm (Firm T). Assume that both firms have no debt outstanding.Shares outstandingPrice per shareFirm B5,400$53Firm T1,300$23Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is$7,900.a. If Firm T is willing to be acquired for $25 per share in cash, what is the NPV of themerger? (Do not round intermediate calculations and round your answer to thenearest whole number, e.g., 32.)b. What will the price per share of the merged firm be assuming the conditions in(a)? (Do not round intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)c. If Firm T is willing to be acquired for $25 per share in cash, what is the mergerpremium? (Do not round intermediate calculations and round your answer to thenearest whole number, e.g., 32.)d. Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one ofits shares for every two of T's shares, what will the price per share of the merged firmbe? (Do not round intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)e. What is the NPV of the merger assuming the conditions in (d)? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. NPVb. Share pricec. Merger premiumd. Price per sharee. NPV

ParticularsFirm BFirm TNumber of shares5,4001,300Stock price$53.00$23.00Synergy benefits from…

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Shares outstanding Price per share Firm B 5,400 $53 Firm T 1,300 $23 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $7,900. a. If Firm T is willing to be acquired for $25 per share in cash, what is the NPV of the merger? (Do not round intermediate calculations and round your answer to the รา AL

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Shares outstanding Price per share Firm B 5,400 $53 Firm T 1,300 $23 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $7,900. a. If Firm T is willing to be acquired for $25 per share in cash, what is the NPV of the merger? (Do not round intermediate calculations and round your answer to the รา AL

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter11: Venture Capital Valuation Methods

Section: Chapter Questions

Problem 1dM

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