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    Bài tập M&A

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    Tapu Nguyễn
    The document discusses a potential acquisition by Mergecandor Corp. of Tenderlon Inc. It provides details on the number of shares and earnings per share of each company. It then calculates what the earnings per share and price per share of the merged company would be under two scenarios: 1) If there is no change to the price/earnings ratios of each company post-merger, the earnings per share of the merged firm would be $12.50 and the price per share would be $35. There would be a wealth transfer to Mergecandor shareholders as the value of their shares increases. 2) If Mergecandor's price/earnings ratio remains unchanged at 7.5 post-mer

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    Bài tập M&A

    Uploaded by

    Tapu Nguyễn
    137 views8 pages
    The document discusses a potential acquisition by Mergecandor Corp. of Tenderlon Inc. It provides details on the number of shares and earnings per share of each company. It then calculates what the earnings per share and price per share of the merged company would be under two scenarios: 1) If there is no change to the price/earnings ratios of each company post-merger, the earnings per share of the merged firm would be $12.50 and the price per share would be $35. There would be a wealth transfer to Mergecandor shareholders as the value of their shares increases. 2) If Mergecandor's price/earnings ratio remains unchanged at 7.5 post-mer

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    The document discusses a potential acquisition by Mergecandor Corp. of Tenderlon Inc. It provides details on the number of shares and earnings per share of each company. It then calculates what the earnings per share and price per share of the merged company would be under two scenarios: 1) If there is no change to the price/earnings ratios of each company post-merger, the earnings per share of the merged firm would be $12.50 and the price per share would be $35. There would be a wealth transfer to Mergecandor shareholders as the value of their shares increases. 2) If Mergecandor's price/earnings ratio remains unchanged at 7.5 post-mer

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    137 views8 pages

    Bài tập M&A

    Uploaded by

    Tapu Nguyễn
    The document discusses a potential acquisition by Mergecandor Corp. of Tenderlon Inc. It provides details on the number of shares and earnings per share of each company. It then calculates what the earnings per share and price per share of the merged company would be under two scenarios: 1) If there is no change to the price/earnings ratios of each company post-merger, the earnings per share of the merged firm would be $12.50 and the price per share would be $35. There would be a wealth transfer to Mergecandor shareholders as the value of their shares increases. 2) If Mergecandor's price/earnings ratio remains unchanged at 7.5 post-mer

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 8

    Câu 1: (khác số so với đề của Cô)

    Câu 2: (khác số so với đề của Cô)


    Câu 3:
    Câu 5:
    Câu 6,7:
    Câu 11:
    Câu 10: Mergecandor Corp. is considering the acquisition of Tenderlon Inc.
    Mergecandor has two million shares outstanding selling at $30, or 7.5 times its
    earnings per share, and Tenderlon has one million shares outstanding selling at $15,
    or five time its earnings per share. Mergecandor would offer to exchange two shares
    of tenderloin for one share of Mergecandor.

    a) If there would be no wealth created from the merger, what would be the
    earnings per share of the merged firm?

    Earnings per share of the merged firm $12.50


    EPS for individual firms
    Earnings = 3,000,000/12.5 = 24,000,000
    Mergecandor 24,000,000/2,000,000 = $8.33
    Tenderlon 24,000,000/1,000,000 = $4.17
    EPS = $12.50

    Its price-to-earnings ratio (P/E ratio)?

    Price-earning-ratio = 12.50/45 = 28 times

    Its share price?

    .833 x 28 = 23.32
    .417 x 28 = 11.68
    23.32+ 11.68 =
    Share price = $35.00
    Difference = $11.64

    Would there be any wealth transfer between the shareholders of the two
    companies?

    The estimated value of Mergecandor would increase with the merger with
    Tenderlon. Therefore increasing Mergecandor’s wealth over Tenderlons.

    Estimated value of Mergecandor = EAT of Mergecandor x EM of Tenderlon


    = 24,000,000 x 28 = $672,000,000

    b) Suppose that, after the merger, the market would not adjust the P/E ratio of
    Mergecandor, which will stay at 7.5. What would be any wealth transfer
    between the shareholders of the two companies?

    Mergecandor = Price Earnings ratio = 7.5/35.00 = $21.43/7.5 = $2.86


    Tenderlon = Price earnings ratio = 3/35.00 = $8.57= $8.57/3 = $2.86
    The stock prices are the same so there would be no wealth transfer between
    companies.

    ----------------

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