罗斯《公司理财》英文习题答案chap030

公司理财习题答案第三十章AnswerstoEnd-of-ChapterProblemsB-233Chapter30:MergersandAcquisitions30.1Thenewcorporationissues$300,000innewdebt.Themergercreates$100,000ofgoodwillbecausethemergerisapurchase.BalanceSheetLagerBrewing(in$thousands)Currentassets$480Currentliabilities$200Otherassets140Long-termdebt400Netfixedassets580Equity700Goodwill100Totalassets$1,300Totalliabilities$1,30030.2IfthebalancesheetforPhiladelphiaPretzelshowsassetsatbookvalueinsteadofmarketvalue,thegoodwillwillbeonly$60,000(=$300,000-$240,000).Thus,thenetfixedassetsare$620,000(=$1,300,000-$480,000-$140,000-$60,000).BalanceSheetLagerBrewing(in$thousands)Currentassets$480Currentliabilities$200Otherassets140Long-termdebt400Netfixedassets620Equity700Goodwill60Totalassets$1,300Totalliabilities$1,30030.3BalanceSheetLagerBrewing(in$thousands)Currentassets$480Currentliabilities$280Otherassets140Long-termdebt100Netfixedassets580Equity820Totalassets$1,200Totalliabilities$1,20030.4a.False.Althoughthereasoningseemscorrect,theStillman-Eckbodatadonotsupportthemonopolypowertheory.b.True.Whenmanagersactintheirowninterest,acquisitionsareanimportantcontroldeviceforshareholders.Itappearsthatsomeacquisitionsandtakeoversaretheconsequenceofunderlyingconflictsbetweenmanagersandshareholders.c.False.Evenifmarketsareefficient,thepresenceofsynergywillmakethevalueofthecombinedfirmdifferentfromthesumofthevaluesoftheseparatefirms.IncrementalcashflowsprovidethepositiveNPVofthetransaction.d.False.Inanefficientmarket,traderswillvaluetakeoversbasedon“Fundamentalfactors”regardlessofthetimehorizon.Recallthattheevidenceasawholesuggestsefficiencyinthemarkets.Mergersshouldbenodifferent.AnswerstoEnd-of-ChapterProblemsB-234e.False.Thetaxeffectofanacquisitiondependsonwhetherthemergeristaxableornon-taxable.Inataxablemerger,therearetwoopposingfactorstoconsider,thecapitalgainseffectandthewrite-upeffect.Theneteffectisthesumofthesetwoeffects.f.True.Becauseofthecoinsuranceeffect,wealthmightbetransferredfromthestockholderstothebondholders.Acquisitionanalysisusuallydisregardsthiseffectandconsidersonlythetotalvalue.30.5(in$millions)NetCashFlowPerYear(Perpetual)DiscountRate(%)ValueSmallFry816%50Whale2010%200BenefitsfromAcquisition:511.76%42.5RevenueEnhancement2.520%12.5CostReduction210%20TaxShelters0.55%10Whale-Fry$3311.28%$292.5Pershareprice=($292.5-100)/5=$38.530.6a.Theweatherconditionsareindependent.Thus,thejointprobabilitiesaretheproductsoftheindividualprobabilities.PossiblestatesJointprobabilityRainRain0.1x0.1=0.01RainWarm0.1x0.4=0.04RainHot0.1x0.5=0.05WarmRain0.4x0.1=0.04WarmWarm0.4x0.4=0.16WarmHot0.4x0.5=0.20HotRain0.5x0.1=0.05HotWarm0.5x0.4=0.20HotHot0.5x0.5=0.25SincethestateRainWarmhasthesameoutcome(revenue)asWarmRain,theirprobabilitiescanbeadded.ThesameistrueofRainHot,HotRainandWarmHot,HotWarm.ThusthejointprobabilitiesarePossiblestatesJointprobabilityRainRain0.01RainWarm0.08RainHot0.10WarmWarm0.16WarmHot0.40HotHot0.25公司理财习题答案第三十章AnswerstoEnd-of-ChapterProblemsB-235Thejointvaluesarethesumsofthevaluesofthetwocompaniesfortheparticularstate.PossiblestatesJointvalueRainRain$200,000RainWarm300,000WarmWarm400,000RainHot500,000WarmHot600,000HotHot800,000b.Recall,ifafirmcannotserviceitsdebt,thebondholdersreceivethevalueoftheassets.Thus,thevalueofthedebtisthevalueofthecompanyifthefacevalueofthedebtisgreaterthanthevalueofthecompany.Ifthevalueofthecompanyisgreaterthanthevalueofthedebt,thevalueofthedebtisitsfacevalue.Herethevalueofthecommonstockisalwaystheresidualvalueofthefirmoverthevalueofthedebt.JointProb.JointValueDebtValueStockValue0.01$200,000$200,000$00.08300,000300,00000.16400,000400,00000.10500,000400,000100,0000.40600,000400,000200,0000.25800,000400,000400,000c.Toshowthatthevalueofthecombinedfirmisthesumoftheindividualvalues,youmustshowthattheexpectedjointvalueisequaltothesumoftheseparateexpectedvalues.Expectedjointvalue=0.01($200,000)+0.08($300,000)+0.16($400,000)+0.10($500,000)+0.40($600,000)+0.25($800,000)=$580,000Sincethefirmsareidentical,thesumoftheexpectedvaluesistwicetheexpectedvalueofeither.Expectedindividualvalue=0.1($100,000)+0.4($200,000)+0.5($400,000)=$290,000Expectedcombinedvalue=2($290,000)=$580,000d.Thebondholdersarebetteroffifthevalueofthedebtafterthemergerisgreaterthanthevalueofthedebtbeforethemerger.Valueofthedebtbeforethemerger:Thevalueofdebtforeithercompany=0.1($100,000)+0.4($200,000)+0.5($200,000)=$190,000Totalvalueofdebtbeforethemerger=2($190,000)=$380,000AnswerstoEnd-of-ChapterProblemsB-236Valueofdebtafterthemerger=0.01($200,000)+0.08($300,000)+0.16($400,000)+0.10($400,000)+0.40($400,000)+0.25($400,000)=$390,000Thebondholdersare$10,000betteroffafterthemerger.30.7Thedecisionhingesupontheriskofsurviving.Thefinaldecisionshouldhingeonthewealthtransferfrombondholderstostockholderswhenriskyprojectsareundertaken.High-riskprojectswillreducetheexpectedvalueofthebondholders’claimsonthefirm.Thetelecommunicationsbusinessisriskierthantheutilitiesbusiness.Ifthetotalvalueofthefirmdoesnotchange,theincreaseinriskshouldfavorthestockholder.Hence,managementshouldapprovethistransaction.Note,if