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61.
The Floral Shoppe and Maggie's Flowers are all-equity firms. The Floral
Shoppe has 2,500 shares outstanding at a market price of $16.50 a share.
Maggie's Flowers has 5,000 shares outstanding at a price of $17 a share.
Maggie's Flowers is acquiring The Floral Shoppe for $42,900 in cash. The
incremental value of the acquisition is $1,200. What is the net present value
of acquiring The Floral Shoppe to Maggie's Flowers?
62.
Taylor's Hardware is acquiring The Corner Store for $25,000 in cash.
Taylor's has 1,500 shares of stock outstanding at a market value of $46 a
share. The Corner Store has 2,200 shares of stock outstanding at a market
price of $8 a share. Neither firm has any debt. The incremental value of the
acquisition is $3,500. What is the value of Taylor's Hardware after the
acquisition?
63.
Firm A is acquiring Firm B for $75,000 in cash. Firm A has 4,500 shares of
stock outstanding at a market value of $27 a share. Firm B has 2,500 shares
of stock outstanding at a market price of $29 a share. Neither firm has any
debt. The incremental value of the acquisition is $2,200. What is the price
per share of Firm A's stock after the acquisition?
64.
The Sweet Shoppe and Candy Land are all-equity firms. The Sweet Shoppe
has 500 shares outstanding at a market price of $96 a share. Candy Land
has 2,700 shares outstanding at a price of $24 a share. The Sweet Shoppe
is acquiring Candy Land for $62,000 in cash. The incremental value of the
acquisition is $3,600. What is the net present value of acquiring Candy Land
to The Sweet Shoppe?
65.
Sleep Tight is acquiring Restful Inns for $52,500 in cash. Sleep Tight has
3,000 shares of stock outstanding at a market price of $38 a share. Restful
Inns has 2,100 shares of stock outstanding at a market price of $24 a share.
Neither firm has any debt. The incremental value of the acquisition is
$1,700. What is the price per share of Sleep Tight after the acquisition?
66.
Outdoor Living has agreed to be acquired by New Adventures for $48,000
worth of New Adventures stock. New Adventures currently has 8,000 shares
of stock outstanding at a price of $32 a share. Outdoor Living has 1,700
shares outstanding at a price of $43 a share. The incremental value of the
acquisition is $21,000. What is the value of the merged firm?
67.
Moore Industries has agreed to be acquired by Scott Enterprises for
$22,000 worth of Scott Enterprises stock. Scott Enterprises currently has
7,500 shares of stock outstanding at a price of $28 a share. Moore
Industries has 1,800 shares outstanding at a price of $12 a share. The
incremental value of the acquisition is $1,100. What is the value per share
of Scott Enterprises stock after the acquisition?
68.
Aardvark Enterprises has agreed to be acquired by Lawson Products in
exchange for $30,000 worth of Lawson Products stock. Lawson has 3,000
shares of stock outstanding at a price of $28 a share. Aardvark has 1,100
shares outstanding with a market value of $23 a share. The incremental
value of the acquisition is $1,400. What is the value of Lawson Products
after the merger?
69.
Hanover Tires is being acquired by Better Tires for $89,000 worth of Better
Tires stock. Hanover Tires has 2,500 shares of stock outstanding at a price
of $36 a share. Better Tires has 6,000 shares outstanding with a market
value of $23 a share. The incremental value of the acquisition is $4,200.
How many new shares of stock will be issued to complete this acquisition?
70.
Glendale Marine is being acquired by Inland Motors for $53,000 worth of
Inland Motors stock. Inland Motors has 6,200 shares of stock outstanding at
a price of $49 a share. Glendale Marine has 1,700 shares outstanding with a
market value of $30 a share. The incremental value of the acquisition is
$2,600. What is the total number of shares in the new firm?
71.
Firm B is being acquired by Firm A for $162,000 worth of Firm A stock. The
incremental value of the acquisition is $4,600. Firm A has 8,500 shares of
stock outstanding at a price of $36 a share. Firm B has 5,900 shares of
stock outstanding at a price of $27 a share. What is the value per share of
Firm A after the acquisition?
72.
Firm A is being acquired by Firm B for $54,000 worth of Firm B stock. The
incremental value of the acquisition is $5,600. Firm A has 2,400 shares of
stock outstanding at a price of $19 a share. Firm B has 2,700 shares of
stock outstanding at a price of $50 a share. What is the actual cost of the
acquisition using company stock?
73.
Merchantile Exchange is being acquired by National Sales. The incremental
value of the acquisition is $1,800. Merchantile Exchange has 1,500 shares
of stock outstanding at a price of $18 a share. National Sales has 3,500
shares of stock outstanding at a price of $54 a share. What is the net
present value of the acquisition given that the actual cost of the acquisition
using company stock is $28,780?
74.
Dressler, Inc., is planning on merging with Weston Foods. Dressler will pay
Weston's shareholders the current value of its stock in shares of Dressler
stock. Dressler's currently has 6,200 shares of stock outstanding at a
market price of $30 a share. Weston's has 2,200 shares outstanding at a
price of $25 a share. How many shares of stock will be outstanding in the
merged firm?
75.
Alpha is planning on merging with Beta. Alpha will pay Beta's shareholders
the current value of their stock in shares of Alpha. Alpha currently has 4,200
shares of stock outstanding at a market price of $40 a share. Beta has 2,500
shares outstanding at a price of $18 a share. The after-merger earnings will
be $8,800. What will the earnings per share be after the merger?
76.
Sue's Bakery is planning on merging with Ted's Deli. Sue's will pay Ted's
shareholders the current value of their stock in shares of Sue's Bakery.
Sue's currently has 4,500 shares of stock outstanding at a market price of
$19 a share. Ted's has 2,300 shares outstanding at a price of $20 a share.
What is the value of the merged firm?
77.
George's Equipment is planning on merging with Nelson Machinery.
George's will pay Nelson's shareholders the current value of their stock in
shares of George's Equipment. George's currently has 4,600 shares of stock
outstanding at a market price of $31 a share. Nelson's has 1,600 shares
outstanding at a price of $38 a share. What is the value per share of the
merged firm?
78.
Pearl, Inc. has offered $920 million cash for all of the common stock in Jam
Corporation. Based on recent market information, Jam is worth $710 million
as an independent operation. For the merger to make economic sense for
Pearl, what would the minimum estimated value of the synergistic benefits
from the merger have to be?
79.
Consider the following premerger information about Firm X and Firm Y:
Assume that Firm X acquires Firm Y by paying cash for all the shares
outstanding at a merger premium of $3 per share. Also assume that neither
firm has any debt before or after the merger. What is the value of the total
equity of the combined firm, XY, if the purchase method of accounting is
used?
