The fair market value of James’ fixed assets is equal to the book value
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chap_29_template.xlsxChapter 29
| Chapter 29 | |||
| Problems 3, 5, 7, 10 ,12 | |||
| Input boxes in tan | |||
| Output boxes in yellow | |||
| Given data in blue | |||
| Calculations in red | |||
| Answers in green | |||
| NOTE: Some functions used in these spreadsheets may require that | |||
| the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. | |||
| To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak" | |||
| and "Solver Add-In." |
#3
| Chapter 29 | |||||
| Question 3 | |||||
| Input Area: | |||||
| Jurion Co. | |||||
| Current assets | Current liabilities | ||||
| Net fixed assets | Long-term debt | ||||
| Equity | - | ||||
| Total | $ - 0 | $ - 0 | |||
| James, Inc. | |||||
| Current assets | Current liabilities | ||||
| Net fixed assets | Long-term debt | ||||
| Equity | - | ||||
| Total | $ - 0 | $ - 0 | |||
| Fair market value | |||||
| Paid | |||||
| Output Area: | |||||
| Goodwill | $ - 0 | ||||
| Jurion Co. - Post merger | |||||
| Current assets | $ - 0 | Current liabilities | $ - 0 | ||
| Net fixed assets | - | Long-term debt | - | ||
| Goodwill | - | Equity | - | ||
| Total | $ - 0 | $ - 0 | |||
#5
| Chapter 29 | |||||
| Question 5 | |||||
| Input Area: | |||||
| Silver Enterprises | |||||
| Current assets | Current liabilities | ||||
| Other assets | Long-term debt | ||||
| Net fixed assets | Equity | - | |||
| Total | $ - 0 | $ - 0 | |||
| All Gold Mining | |||||
| Current assets | Current liabilities | ||||
| Other assets | Long-term debt | ||||
| Net fixed assets | Equity | - | |||
| Total | $ - 0 | $ - 0 | |||
| Market value of fixed assets | |||||
| New long-term debt | |||||
| Output Area: | |||||
| Goodwill | $ - 0 | ||||
| Silver Enterprises - Post Merger | |||||
| Current assets | $ - 0 | Current liabilities | $ - 0 | ||
| Other assets | - | Long-term debt | - | ||
| Net fixed assets | - | Equity | - | ||
| Goodwill | - | ||||
| Total | $ - 0 | $ - 0 | |||
#7
| Chapter 29 | |||
| Question 7 | |||
| Input Area: | |||
| After-tax annual cash flow | |||
| Teller market value | |||
| Penn market value | |||
| Discount rate | |||
| Stock offer | |||
| Cash offer | |||
| Output Area: | |||
| a. | V*k | ERROR:#DIV/0! | |
| Cash cost | $ - 0 | ||
| Equity cost | ERROR:#DIV/0! | ||
| b. | NPV cash | ERROR:#DIV/0! | |
| NPV stock | ERROR:#DIV/0! | ||
| c. | ERROR:#DIV/0! | ||
#10
| Chapter 29 | |||||
| Question 10 | |||||
| Input Area: | |||||
| Firm B | Firm T | ||||
| Shares outstanding | |||||
| Share price | |||||
| Synergy benefits | |||||
| Acquisition price | |||||
| d. | Shareholders receive | for | |||
| Output Area: | |||||
| a. | NPV | $ - 0 | |||
| b. | New share price | ERROR:#DIV/0! | |||
| c. | Merger premium | $ - 0 | |||
| d. | New shares of B | ERROR:#DIV/0! | |||
| VBT | $ - 0 | ||||
| Share price | ERROR:#DIV/0! | ||||
| e. | NPV | ERROR:#DIV/0! | |||
#12
| Chapter 29 | |||||
| Question 12 | |||||
| Input Area: | |||||
| Firm A | Firm B | ||||
| Total earnings | |||||
| Shares outstanding | |||||
| Price per share | |||||
| Acquisition price | |||||
| Output Area: | |||||
| Cost | $ - 0 | ||||
| Shares given up by A | ERROR:#DIV/0! | ||||
| a. | EPS | ERROR:#DIV/0! | |||
| b. | Old P/E | ERROR:#DIV/0! | |||
| New price | ERROR:#DIV/0! | ||||
| c. | P/E | ERROR:#DIV/0! | |||
| d. | Price | ERROR:#DIV/0! | |||
| P/E | ERROR:#DIV/0! | ||||
| At the current acquisition price, this is a | |||||
| ERROR:#DIV/0! | acquisition. | ||||
