Please the following article, and make sure to identify methodology, gaps, and key findings.© BrainMass Inc. brainmass.com October 25, 2018, 8:31 am ad1c9bdddf
1. Please pay attention to your university's suggested citation style. This citation style should also tell you how to format your final paper, e.g. cover paper, headings format, etc.
My first reaction when I opened the article was "What?!?" I tell you, the paper's length demands such a reaction. However, on second look, the length of the paper, all 87 pages of it, is justified. After all the paper is about the long-run share performance of U.K. firms which means share prices of several companies - something that inspires voluminous data, figures and tables. So upon a cursory reading of the entire paper, I was proven right - half of the paper is devoted to figures and tables about the authors' findings.
My second reaction was why is this the first paper I have read about the study of the impact of mergers and acquisitions on the share prices of the acquiring companies? Nevertheless, I am glad I came about this article. It was very informative.
Lastly, in the introductory page of the paper, it was mentioned that "This paper is circulated for discussion and comment only and should not be quoted without the permission of the authors" (Conn & Cosh, 2001, p. 2). I was wondering if we have this permission.
Given the authors' research question, the study involved the examination of the share prices of "3,260 acquisitions of public and private ...
The solution discusses the long-run share performance in cross-border acquisitions.
1) What is the net present value of the project?
2) a. What is the gain from merger? b. What is the cost of the cash offer? c. What is the NPV of the acquisition under the cash offer?
25. Project Evaluation.
The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25.
Year Unit Sales
It is expected that net working capital will amount to 20 percent of sales in the following year. For example, the store will need an initial (year-0) investment in working capital of .20 × 22,000 × $40 = $176,000. Plant and equipment necessary to establish the Giftware business will require an additional investment of $200,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 35 percent. What is the net present value of the project? The discount rate is 20 percent.
Merger Gains and Costs.
8. Merger Gains and Costs. Velcro Saddles is contemplating the acquisition of Pogo Ski Sticks, Inc. The values of the two companies as separate entities are $20 million and $10 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $500,000 per year in perpetuity. Velcro Saddles is willing to pay $14 million cash for Pogo. The opportunity cost of capital is 8 percent.
a. What is the gain from merger?
b. What is the cost of the cash offer?
c. What is the NPV of the acquisition under the cash offer?
Attached you will find the PDF documents to some practice study problems that I am still trying to grasp and understand. These are the ones that I did not know how to do. Your help is greatly appreciated.
Chapter 8: practice problem 25 on PDF document page 234
Chapter 21: practice problem 8 on PDF document page 595View Full Posting Details