ExpiredAnalyze nestle csr initiative plan focuses on society issues
This is a CSR project, and choose to nestle as our company Note: Please give answer on mentioned words (must add intext citation) and required
Coursework Task
Expired
Assignment Instructions
Blue Ltd is an unlisted retailer and wishes to regain competitive advantage by acquiring a rival company, Plum Ltd, in order to pursue economies of scale and scope. The objective of the new acquisition is to create shareholder value by generating synergistic cost savings.
The free cash flows to equity are:
Blue Ltd: £132.5m
Plum Ltd: £65.4m
Further information:
The value of the synergistic pre-tax cost savings is expected to be £12m per annum. The post-acquisition cost of equity is anticipated to be 13% and the combined company is forecast to grow at an annual rate of 4%.
Both companies pay corporation tax at an annual rate of 25% and this is expected to remain unchanged after acquisition.
Required:
a) Estimate the post-acquisition equity value.
(6 marks)
b) If the pre-acquisition value of Blue Ltd is £1420m, then what is the maximum that Blue Ltd should pay for Plum Ltd? Please provide a very brief comment on your maximum value estimate.
(4 marks)
c) Discuss the risks associated with Blue Ltd acquiring Plum Ltd and briefly consider how Blue Ltd’s board could mitigate those risks.
Word limit for discussion 250 words.
Expert Answer
Asked by: Anonymous
Plagiarism Checked
Answer Rating:
4.6/5
Plagiarism free Answer files are strictly restricted for download to the student who originally posted this question.
Disclaimer
Full Grade only partners with verified online tutors who have in depth knowledge of subject areas. Our tutors double check the solutions prior to submission to ensure their correctness.
Related Assignments
Discuss three good corporate governance practices
You are an independent consultant, counseling companies on corporate governance issues. You have been engaged by JKL Renew Pty Ltd (JKL) to advise them on
Describe organizational culture in two different workplaces
Explore the following linked resources that describe organizational culture in two different workplaces: the Gjøa offshore platform and Volkswagen (during 2006-2015). 1. The Life Onboard
What communication technology should bob use communicating
Bob is project manager for a construction company. The firm is the general contractor and is building a skyscraper in a well-known Middle Eastern country.
What are the standards and values of the organisation
Explain via a report the values and standards required by an organisation and how they relate to performance management. Include in the report team and
Implement a new electronic health record system
Our healthcare organization, Health First, is embarking on a project to implement a new electronic health record (EHR) system. This project aims to streamline patient
