Calculate the Equity Value for a Public Target in a Precedent

question 15

Multiple Choice

Calculate the equity value for a public target in a precedent transactions analysis given the following information.

Details:
Share price: $20.00
Acquirer's offer price per share: $40.00
Fully diluted shares outstanding: 100.00mm

• A)$200.00mm
• B)$400.00mm
• C)$150.00mm
• D)$250.00mm

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Definitions:

Variable Costs

Expenses that vary in relation to the amount of activity or production volume within a company.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Short Run

A period in economics where the output is influenced by the level of production capacity, and certain economic conditions or costs cannot change.

Long Run

In economics, a period in which all inputs can be adjusted by firms, and there are no fixed costs, allowing for full industry adjustment.