Dexter Department Stores Has a Market Value of $400 Million

question 22

Essay

Dexter Department Stores has a market value of $400 million and 20 million shares outstanding. Walnut Stores has a market value of $134 million and 13.4 million shares outstanding. Dexter is deciding to acquire Walnut Stores. The top management of Dexter's have determined that due to the synergies between the firms the combination will worth $667 million. Dexter expect to pay a $67 million premium for Walnut Stores. If Dexter offers 10 million shares in exchange for the 13.4 million shares of Walnut, what will the after acquisition stock price of Dexter be?

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Definitions:

Realistic Way

An approach or method based on accepting situations as they are and dealing with them in a practical and effective manner.

Peace of Lodi

The Peace of Lodi, established in 1454, was a peace agreement that created a balance of power among the Italian city-states of Milan, Naples, and Florence, leading to nearly 40 years of stability in the region.

Babylonian Captivity

A period in Jewish history from 586 to 538 BCE when a number of people from the ancient Kingdom of Judah were captives in Babylonia.

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An independent, self-governing city that also possesses surrounding territories, forming an independent political entity.