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; its beta is 1.15 (given its target capital structure). Vandell has $8.94 million in debt that trades at par and pays an 7% interest rate. Vandell’s free cash flow (FCF0) is $2 million per year and is expected to grow at a constant rate of 5% a year. Both Vandell and Hastings pay a 40% combined federal and state tax rate. The risk-free rate of interest is 7% and the market risk premium is 6%.

Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell’s free cash flows to be $2.5 million, $3.2 million, $3.4 million, and $3.82 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 5% rate. Hastings plans to assume Vandell’s $8.94 million in debt (which has an 7% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.6 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of 30% debt will be maintained. Interest at Year 4 will be $1.482 million, after which the interest and the tax shield will grow at 5%.

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. Do not round intermediate calculations.

The bid for each share should range between $______ per share and $_____ per share.

 

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Mergers come in waves, mainly during periods of stock market buoyancy. We do not know why. Discuss fully the various motives for conducting mergers and acquisitions and for each motive cite an actual case. There are also some of the dubious reasons for mergers, what are they?

 

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Merkle Hash Tree and its applications:   

Suppose a sender S uses a Merkle hash tree to authenticate these messages to a receiver R.

a)     What is the necessary condition for a set of data to be authenticated by Merkle-tree?

b)     After the tree is formed, what should be done before authentication can take place?

c)     Describe how Merkle-hash trees are used for memory integrity protection in computer systems and in Cryptocurrencies.  

 

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Mesa Company’s fixed budget for the first quarter of calendar year 2011 reveals the following. Prepare flexible budgets, following the format of Exhibit 8.3, that show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 7,500, 10,000, and 12,500 units.

 

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• Messaging Servers – DB
• 1.  What are the best methods to increase your personal e-mail security?
• 2.  Exchange 2010 supports many recipient objects. Identify and discuss at least 3 of these objects. Which of these objects do you think has the most security risk and the least security risk when deployed in the messaging environment and why?

In 150 – 200 words;

• Describe three exchange recipient objects you have chosen.
• Discuss advantages and disadvantages of using each
• Which do you think has the most and least risk exposure?

 

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