StudyXY
RegisterLog in

Valuation Of Vaccaro: Estimating The Discount Rate, Dollar Value, And Maximum Price Per Share For Acquisition

Master valuation techniques with this homework solution.

Emily Jackson
Contributor
4.1
45
6 months ago
Preview (2 of 1 Pages)
100%
Purchase to unlock

Page 1

Valuation Of Vaccaro: Estimating The Discount Rate, Dollar Value, And Maximum Price Per Share For Acquisition - Page 1 preview image

Loading page ...

Valuation of Vaccaro: Estimating the Discount Rate, Dollar Value, and MaximumPrice per Share for Acquisitiona.What discount rate should be used to discount the estimated cash flows? (Hint:Use Apilado's rstodetermine the market riskpremium.)Round your answer to two decimal places.________%Cost of equity rs= 14%Risk free rate rrf= 4%Beta b = 1.0rs= rrf+ (RPm) * b14 = 4 + (RPm) * 1.0RPm= (14-4)/1.0RPm= 10%Discount Rate = rrf+ (RPm) * b= 4 + 10* 1.75= 4 +10.5=21.5%b.What is the dollar value of Vaccaro to Apilado? Round your answer to two decimal places. Enter youranswer in millions. For example, an answer of $13,000,000 should be entered as 13.$________millionInput 0, 1.30, 1.50, 1.75, and 26.94(2.00 + 24.94) into the cash flow register, I = 21.5%,NPV =1.3/1.215 + 1.5/(1.215)2+ 1.75/(1.215)3+ 24.94/(1.215)4=$14.51millionc.Vaccaro has 1.2 million common shares outstanding. What is the maximum price pershare that Apiladoshould offer for Vaccaro? Round your answer to the nearest cent.$________PMax= V/N = $14.51/1.2 =$12.1

Page 2

Study Now!

XY-Copilot AI
Unlimited Access
Secure Payment
Instant Access
24/7 Support
Document Chat

Document Details

Subject
Finance

Related Documents

View all
Past Exams

Texas Life and Health Insurance Exam 150 Questions

A study-sharing site offering verified Q&A for the Texas Life and Health Insurance Exam. Ideal for candidates preparing for certification with updated 2023 content, covering key laws, policies, and insurance concepts.

Class Notes

Understanding Obligation and Deobligation in Resou

Obligation: legally reserving funds for expenses e.g: travel orders. Deobligation: adjusting obligations downward when actual costs are less, freeing funds for other needs. Ensures efficient effective use of finite resources in government operations.

Solved Assignments

Budgeting for Life After High School

High school budgeting activity featuring a real-life scenario for college student Lisa. Students create a zero-based budget using her income, expenses, and support funds to learn personal finance, savings, and responsible spending.

Solved Assignments

Ch 4 les 1

Zach, a college freshman, uses his new credit card with a 19% APR for emergencies during a work break, facing minimum payments that may lead to costly interest and debt.

Class Notes

Understanding Credit Reports Analyzing John's Fina

This activity uses John Doe's financial story and a sample credit report to help students learn how to read and understand credit reports. Students analyze his credit use, debts, and recent financial inquiries to answer related questions.

Solved Assignments

Financial Statement Analysis

Detailed breakdown of financial statements and key performance indicators.

Solved Assignments

CEO pay at John Deere and Caterpillar

Compares CEO pay at two companies.

Solved Assignments

Financial Planning and Budget Analysis

A financial study on budgeting techniques and financial planning strategies.

Solved Assignments

Financial Research Report

A detailed report analyzing financial trends, risk factors, and economic indicators.

Solved Assignments

WACC Project Verizon Communication Inc

This document provides a comprehensive analysis of the Weighted Average Cost of Capital (WACC) for Verizon, offering insights into financial decision-making and investment strategies.