If the transaction is using 100% of Acquiring Co.'s stock, the exchange ratio is The number of new shares issued by Acquiring Company is The post-merger EPS of the combined company is If the transaction is using 100% cash, all the cash is borrowed at an annual rate of 75%, and the tax rate is 40%, the post-merger earnings of the combined company are And the post-merger EPS of the combined company is

If the transaction is using 100% of Acquiring Co.'s stock, the exchange ratio is The number of new shares issued by Acquiring Company is The post-merger EPS of the combined company is If the transaction is using 100% cash, all the cash is borrowed at an annual rate of 75%, and the tax rate is 40%, the post-merger earnings of the combined company are And the post-merger EPS of the combined company is

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 17E

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You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt $3,562 Target Cash and Cash Equivalents $5,147 % Debt Financing 40% % Equity Financing 60% Equity Financing Fees 4.0% Debt Financing Fees 1.5% Other Transaction Costs $800
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Question Armadillo Enterprises acquired the following equity investmentsat the beginning of year 1 as trading investments. Description Number of shares Market price per share Total price Finestra Company 15,000 X $25 $387,500 BVD Company 20,000 x$18 |S360,000 Market values at theend of Years 1 &2 are presented below: Market/Fair Value End of year 1 End of year 2 Finestra Company IS19 $23 BVD Company $22 $28 REQUIREMENTS: ( Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo Enterprises sells 15,000 shares of BVD Company for $16at the beginning of year 2. Prepare the journal entry to record thesale. Prepare the adjusting journal entry required at the end of year2. Assume that ArmadilloEnterprises now holds these investments asavailable-for-sale. Prepare the journal entry to record the acquisition of theinvestments. Prepare the adjusting journal entry required at the end of year1. Armadillo…
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Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange. Selected data on the two companies are shown in the following table: Apex $750 Pinnacle $215 $100 $ 30 50 30 32 11 $ 2.00 $0.90 $1.00 $0.40 16 11 45% 40% Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Share price Earnings per share Dividends per share P/E ratio Dividend payout ratio Assume that there are immediate synergistic benefits of $3 million if Apex and Pinnacle merge. Determine EPS for the combined company if Apex offers a (Round your answers to three decimal places): a. 20 percent premium for Pinnacle $ b. 30 percent premium for Pinnacle $ c. 40 percent premium for Pinnacle $