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Problem 21-2 "Tutor please results on a excel spre...

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Problem 21-2 "Tutor please results on a excel spread sheet , Thank you Merger Valuation Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.2%. Assume that the risk-free rate of interest is 7% and the market risk premium is 6%. Both Vandell and Hastings face a 35% tax rate. Hastings estimates that if it acquires Vandell, interest payments will be $1,600,000 per year for 3 years after which the current target capital structure of 30% debt will be maintained. Interest in the fourth year will be $1.479 million after which interest and the tax shield will grow at 4%. Synergies will cause the free cash flows to be $2.6 million, $3.2 million, $3.3 million, and then $3.71 million in Years 1 through 4, respectively, after which the free cash flows will grow at a 4% rate. What is the unlevered value of Vandell? Vandell's beta is 1.10. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $_________ million What is the value of its tax shields? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $__________ million What is the per share value of Vandell to Hastings Corporation? Assume Vandell now has $11.89 million in debt. Round your answer to the nearest cent. $__________ per share,Tutor thank you for the answer can you resend it to me again but this time identify which answers are for question A) question B) and question C) it is Finance-8094726.xls Thank you,Thank you Tutor your the best:)

 

Paper#5381 | Written in 18-Jul-2015

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