subject
Business, 30.07.2021 02:20 nculberson6

Penn Corp. is analyzing the possible acquisition of Teller Company. Both firms have no debt. Penn believes the acquisition will increase its total aftertax annual cash flow by $2 million indefinitely. The current market value of Teller is $54 million, and that of Penn is $84 million. The appropriate discount rate for the incremental cash flows is 10 percent. Penn is trying to decide whether it should offer 45 percent of its stock or $72 million in cash to Teller’s shareholders. a. What is the cost of each alternative? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars, i. e. 1,234,567.)
Cash cost$
Equity cost$
b. What is the NPV of each alternative? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars, i. e. 1,234,567.)
NPV cash$
NPV stock$
c. Which alternative should Penn choose?
Stock
Cash

ansver
Answers: 3

Another question on Business

question
Business, 22.06.2019 04:00
Don’t give me to many notifications because it will cause you to lose alot of points
Answers: 1
question
Business, 22.06.2019 06:50
Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process.b)consumers have the right to clean air; consumers are dominant in the bargaining process.c)firm has the right to pollute; firm is dominant in the bargaining process.d)firm has the right to pollute; consumers are dominant in the bargaining proces
Answers: 1
question
Business, 22.06.2019 07:10
In a team environment, a coordinator is? a person with expert knowledge or skills in a particular area the team needs. a good listener who works to resolve social problems among teammates. a leader who team members focus on their tasks. a good networker who likes to explore new ideas and possiblities.
Answers: 2
question
Business, 22.06.2019 20:50
Which of the following statements regarding the southern economy at the end of the nineteenth century is accurate? the south was producing as much cotton as it had before the civil war.
Answers: 3
You know the right answer?
Penn Corp. is analyzing the possible acquisition of Teller Company. Both firms have no debt. Penn be...
Questions
question
Mathematics, 23.09.2020 04:01
question
Mathematics, 23.09.2020 04:01
question
Mathematics, 23.09.2020 04:01
question
Mathematics, 23.09.2020 04:01
question
English, 23.09.2020 04:01
question
Mathematics, 23.09.2020 04:01
question
Mathematics, 23.09.2020 04:01
Questions on the website: 13722363