Estimated premium required to acquire Fodder Co = 0.25 × 36,086,000 = $9,022,000
Pls tell from where 36086000 came from , also premium is calculated on Ve right?
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Pursuit co (jun 12)
4y ago#1There is no question called Pursuit in the June 2012 exam. Are you sure you have the date correct?
sorry its jun 11
4y ago#3The value of the firm (equity plus debt) is the PV of the free cash flows discounted at the WACC, and is 40,095.
From the question, the equity is 90% of the total firm value and so is 90% x 40,095 = 36,086.
The question also says that the payment will be the equity value plus 25%, so the premium payable on the equity value is 25% x 36,086
hello Sir
how did the increase in debt capacity figure $24584500 came from? already took 50 out of total combined value
of the same question Pursuit co
2y ago#5The value of the combined company is 189,169,000. If they maintain the capital structure then the debt will have a market value of 1/2 x 189,169,000 = 94,584,500. Currently the debt has a market value of 70,000,000, so an extra 24,584,500.
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