UGB363: Company A has 8 million shares in issue and Company B 10 million. On day 1 the market value per share is £6: Strategic Corporate Finance Assignment, USM, Malaysia
University | Universiti Sains Malaysia (USM) |
Part B
- Company A has 8 million shares in issue and Company B 10 million. On day 1 the market value per share is £6 for A and £10 for B. On day 2, the management of B decides, at a private meeting, to make cash takeover bid for A at a price of £7 per share. The takeover will produce large operating savings with a value of £20 million.
cta_question _2
On day 5, B publicly announces an unconditional offer to purchase all shares of A at a price of £7.00 per share with settlement on day 20. Details of the large savings are not announced and are not public knowledge. On day 15, B announces details of the savings, which will be derived from the takeover.
Required:
Ignoring tax and the time-value of money between days 1 and 20, and assuming the details given are the only factors having an impact on the share prices of A and B, determine the day 2, day 5, and day 15 share prices of A and B if the market is:
1. Semi-strong form efficient, and
- Strong form efficient
In each of the following circumstances:
- the purchase consideration is cash as specified above, and (5 marks)
- the purchase consideration, decided upon on day 2, and publicly announced on day 5, is one newly issued share of B for each share of (10 marks)
- The Efficient Market Hypothesis states that “security prices fully reflect all available information” (Fama, 1991).
Required:
Critically evaluate the previous statement, ensuring the response is supported with relevant empirical evidence.
In this section students should demonstrate an understanding and knowledge of the theoretical aspects that underpin the differing strengths of market efficiency. The discussion/evaluation should be supported with relevant, contemporary, academic research that has been undertaken within this field and should be referenced accordingly. Ensure the response does not become overly descriptive within its approach, rather, attempt to incorporate a critical viewpoint throughout, allowing logical conclusions to be offered.
cta_question _3
Get Help By Expert
Master your UGB363 Strategic Corporate Finance Assignment with our expert assistance! As your dedicated malaysia assignment helper, we specialize in providing top-notch management assignment writing service. Students in Malaysia can confidently pay our experts to tackle the intricacies of strategic corporate finance, ensuring academic success. Trust us to deliver tailored support that meets your unique needs. Invest in your academic journey today and let us guide you towards excellence!
Recent Solved Questions
- DSC7053 Artificial Intelligence And Machine Learning, Assignment, VUC, Malaysia
- MPU3233: Plastic bags are commonly used on a daily basis; however, these seemingly insignificant: Design Thinking Assignment, UIU, Malaysia
- Unit 1: International Marketing Management, Assignment, Malaysia
- International Finance Assignment, SC, Malaysia The British Pound Sterling (GBP) is the fourth most popularly traded currency and the third most commonly held reserve currency
- CSC508: Data Structure Assignment, UiTM, Malaysia Define your own Binary Search Tree (BST) data structure using Linked List
- MPU3313: Health and Wellness 2 Assignment, OUM, Malaysia Use the relevant resources to discuss the therapeutic diet for a diabetic and hypertension person in order to ensure
- Scientific Research Review Assignment 4: Advancements and Ethical Practices in Your Study Area Literature Synthesis
- BUS707: Strategic Direction Assignment, LIBT, Malaysia Critically analyze the current strategic aims and objectives of your chosen scenario/organization
- Sustainable Project Management Report, OUM, Malaysia Identify a project that integrates Sustainable developments into its project initiation and management
- Exploring the Impact of Play-Based Learning on Phonemic Awareness and Phonics Skills in Kindergarten