Ask Question, Ask an Expert


Ask Basic Finance Expert

problem: Hampshire- Cathway HC a large corporation with no growth in its real earnings is considering acquiring 100 percent of the shares of Trilennium Corporation, a young firm with the high growth rate of earnings. The acquisitions examine group at HC has produced the following table of relevant information.


Hampshire Cathaway


Earnings per share



Dividend per share



Number of shares

200 million

10 million

Stock Price



HC's analysts determine that investors expect growth of about 6 percent per year in Tirlenniums earnings & dividends. They suppose that with the improvements in management that HC could bring to Trilennium, its growth rate would be 10 percent per year with no additional investments outlays beyond those already expected.

[A] Determine the expected gain from the acquisitions?

[B] find out the net present value of the acquisition to HC shareholders if it costs an average of dollar 30 per share to acquire all of the outstanding shares.

[C] Would it matter to HC's shareholders whether the shares of Trilennium stock are acquired by paying cash or HC stock?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918023

Have any Question? 

Related Questions in Basic Finance

In calculation of a payback period what use is made of cash

In calculation of a payback period, what use is made of cash flows occurring after the end of the payback period?

Nicole corporations year-end 2009 balance sheet lists

Nicole Corporation's year-end 2009 balance sheet lists current assets of $756,000, fixed assets of $606,000, current liabilities of $539,000, and long-term debt of $694,000. What is Nicole's total stockholders' equity?

The final paper ought to show an understudys capacity to

The Final Paper ought to show an understudy's capacity to incorporate and orchestrate course ideas with chose readings to impart his/her comprehension of legal bookkeeping, extortion ideas, and their applications in asso ...

Quantum technology had 652000 of retained earnings on

Quantum Technology had $652,000 of retained earnings on December 31, 20X2. The company paid common dividends of $33,300 in 20X2 and had retained earnings of $513,000 on December 31, 20X1. a. How much did Quantum Technolo ...

Money and the prices in the long run and open

Money and the Prices in the Long Run and Open Economies Please no plagiarism. I have attached the paper from last week. The company was TORO. The organization's strategic plan you wrote about in Week 2 calls for an aggre ...

Finance problemyou have been asked to assess the expected

Finance Problem You have been asked to assess the expected financial impact of each of the following proposals to improve the profitability of credit sales made by your company. Each proposal is independent of the other. ...

Economic indicators stock market conditions serve as a

Economic Indicators Stock market conditions serve as a leading economic indicator. If the U.S. economy is in a recession, what are the implications of this indicator? Why might this indicator be inaccurate?

When your governor took office 100000 children in your

When your governor took office, 100,000 children in your state were eligible for Medicaid and 200,000 children were not. Now, thanks to a large expansion in Medicaid, 150,000 children are eligible for Medicaid and 150,00 ...

Andiola corporation is evaluating whether to lease or

Andiola Corporation is evaluating whether to lease or purchase equipment. Its tax rate is 30 percent. The purchase price is $1.2 million, required modications to the equipment will cost $50,000. The company would depreci ...

Investmentsinstructions for asset returns paperstep 1

Investments Instructions for Asset Returns Paper Step 1 Extending Siegel (1992) graphs to 2014 This section uses the file "AssetHistoricalReturns" to replicate and extend Siegel (1992) results to 2014. 1. Create a chart ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate