QUESTION ONE A Merger can be defined as a Voluntary amalgamation of two firms on roughly equal terms into one new legal entity. Mergers are effected by exchange of the pre-merger stock (shares) for the stock of the new firm. Owners of each pre-merger firm continue as owners‚ and the resources of the merging entities are pooled for the benefit of the new entity. If the merged entities were competitors‚ the merger is called horizontal integration‚ if they were supplier or customer of one another
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relative valuation models operate by comparing the company in question to other similar companies. These methods generally involve calculating multiples or ratios‚ such as the price-to-earnings multiple‚ and comparing them to the multiples of other comparable firms. For instance‚ if the P/E of the firm you are trying to value is lower than the P/E multiple of a comparable firm‚ that company may be said to be relatively undervalued. Generally‚ this type of valuation is a lot easier and quicker to do
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risk as 6%‚ because most corporations 37% had used a market risk rate of 5-6%. I choose the upper limit just to be conservative and not take the lower one in case it has been too optimistic. I also choose the higher market risk rate of 6% since the S&P was down 7.3% overall for the year. I choose the average beta of Nike over the last six years which was 0.80%. The risk free rate in all my textbooks usually use is a risk free rate of T-bills but corporations use 10-year treasuries 33% of the time
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1970. For many years‚ P & G keep following their purpose and social responsibility at every and every corner in the world: “We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers‚ now and for generations to come. As a result‚ consumers will reward us with leadership sales‚ profit and value creation‚ allowing our people‚ our shareholders and the communities in which we live and work to prosper.” Until now‚ P & G has become the
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amongst competitors in the Diversified Industrials sector. Looking at the last 52 weeks of trading activity‚ GE has traded in the range of $13.75- $21.65. Most recently‚ the stock closed at $19.96 (as of 5/19/11)‚ resulting in a Price to Earnings ratio of 15.9. A visual depiction of GE’s movement over the past year is provided in Exhibit 1. With a Beta of 1.66‚ it is evident that GE on average‚ is more volatile than the market. Although relatively a risky stock‚ buying in at the 52 week low of
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issued for Seahorse = [IS] = 2 Shareholders x 150‚000 shares / each = 300‚000 stocks Dividends paid D0 = 2 x $320‚000 = $640‚000 or DPS = $640‚000 / 300‚000 = $2.13 Calculation of company SeaHorse growth rate gSH = ( 1 – Dividend pay out Ratio) x ROE Dividend Payout Ratio (DPR) is equal to: $640.000 Dividends Dividends Shares = DPS = 300.000 = 42.99% DPR = = EPS 5.08 Net.Income Net.Income Shares Therefore gSH = ( 1 – 42.99% ) x 25% = 14.25% • Calculation of Industry average growth rate Since Nautigas
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Question 1 Using a SWOT analysis‚ identify the key strategic fits between the two companies. What are the most important expected synergies? Strength Weakness Ability to serve customers at lower cost Compaq was a significant player in enterprise systems and HP in IT services business Wider spectrum of products for its clients through the merger Strong brand recognition‚ something that takes time to build Highly complimentary R&D Overlapping management Overlapping product
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margin of 10 percent‚ total asset turnover of 0.98‚ and ROE of 14.48 percent. | Required: | What is this firm’s debt-equity ratio? (Round your answer to 2 decimal places (e.g.‚ 32.16).) | Debt-equity ratio | | Explanation: We can use the Du Pont identity and solve for the equity multiplier. With the equity multiplier we can find the debt-equity ratio. Doing so we find: | ROE = (Profit margin)(Total asset turnover)(Equity multiplier) | 0.1448 = (0.10)(.98)(Equity multiplier)
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Wenyu Li BUS 581 03/01/2015 Chapter 7 MINI CASE Your employer‚ a mid-sized human resources management company‚ is considering expansion into related fields‚ including the acquisition of Temp Force Company‚ an employment agency that supplies word processor operators and computer programmers to businesses with temporary heavy workloads. Your employer is also considering the purchase of a Biggerstaff & Biggerstaff (B&B)‚ a privately held company owned by two brothers‚ each with 5 million shares of stock
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Assignment 1 Additional Background Information of Wal-Mart in 2005: * Sales Revenue: In 2005‚ Wal-Mart had $312.4 billion in sales‚ more than 6‚200 facilities around the world—including 3‚800 stores in the United States and 2‚800 elsewhere‚ employing more than 1.6 million "associates" worldwide. * Other Innovations: Later in October Wal-Mart announced it would implement several environmental measures to increase energy efficiency. The primary goals included spending $500 million a year
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