MegaToy Inc

question 13

Essay

MegaToy Inc.is considering acquiring Action Figures Inc.,both publicly traded firms in the toy industry.Action Figures is currently trading at $18 per share and has 15 million shares outstanding.The executive team at MegaToy believes that the present value of potential synergies is $70 million if the firms combine.What is the highest bid price per share that MegaToy should consider paying for Action Figure shares? What is the largest percentage premium over the current share price MegaToy would be willing to pay?

---

Definitions:

Margaret Floy Washburn

The first woman to earn a Ph.D. in psychology (1894) and known for her work in animal behavior and motor theory development.

Mary Whiton Calkins

An American psychologist and philosopher, the first woman to become president of the American Psychological Association.

Functionalism

A school of psychology that focuses on how mental and behavioral processes enable an organism to adapt, survive, and thrive.

Self-Awareness

Awareness about one’s distinct personality, sentiments, reasons for actions, and longings.