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##### Problem 21-3 "Tutor will you please place the resu...

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Problem 21-3 "Tutor will you please place the results on a excel spreadsheet , Thank you" Merger Bid 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 7.5%. Assume that the risk-free rate of interest is 4% and the market risk premium is 7%. Both Vandell and Hastings face a 30% tax rate. Vandell's free cash flow (FCF0) is $1 million per year and is expected to grow at a constant rate of 4% a year; its beta is 1.50. 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 $1.472 million after which interest and the tax shield will grow at 4%. Synergies will cause the free cash flows to be $2.5 million, $2.7 million, $3.5 million, and then $3.69 million, after which the free cash flows will grow at a 4% rate. Assume Vandell now has $10.84 million in debt. Indicate the range of possible prices that Hastings could bid for each share of Vandell common stock in an acquisition. Round your answers to the nearest cent. The bid for each share should range between $__________ per share and $______per share.,Tutor will you check the calculation in assignment Download Attachment: Finance-8091093.doc and reply with the assignment in a excel format,Tutor thank you for the effort, but can you tell me what the other value is her is the question. "The bid for each share should range between $__________ per share and $______per share." one answer is 2.62 what is the other per share?,Thank you,Dear Tutor I am sorry to ask this of you but they answer came up wrong,is it possible to recheck the solution. Thank you

Paper#6986 | Written in 18-Jul-2015

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