Work Question 1) Why WACC cannot be used as a discount for calculating the value of a merger and acquisition for the first few years of the analysis?…

The cost of debt is 5%

The cost of equity is 20%

The tax rate is 40%

The company has 15 million shares outstanding

The current stock price is $2.05

The company is currently holding no financial assets.

The company has $3,000,000 in debt.

WACC, the cost of capital, is equal to 11.5%

RSU, the cost of unlevered equity, is equal to 12.5%

Question 5)

Calculate the value of the debt tax shield.

Question 6)

Calculate the horizon value of the target.

Question 7)

Calculate the value of operations.

Question 8)

What is the highest offer price we can make? Is the acquisition feasible?

Question 9)

Why do the target’s free cash flows vary from one acquirer to another?

Question 10)

What are the main disadvantages of the payback method for evaluating projects?

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more