Mergers and Acquisitions from the Formula Sheet

Question 1

In the acquisition chart how do calculate shares?

Answer 1

= Shares listed for A + (Shares listed for B* Ratio)

Question 2

What does 2 for 1 mean?

What does 5 for 2 mean?

Answer 2

1. 2/1 = 2
2. 5/2 = 2.5

Question 3

How do you calculate earnings per share?

Answer 3

= (Total Earnings/Shares)

* use earnings listed under ratio heading

Question 4

How do you calculate share value?

Answer 4

(Share Price A + Number of Shares A) * ( Share Price B + Market Cap Synergy/Ratio Shares

* Do not include market cap synergy is there is no synergy

Question 5

How do you calculate assets per share?

Answer 5

(Net Assets A + Net Assets B)/ Ratio Share

Question 6

How do you calculate the other company’s calculations?

Answer 6

1. Obtain Company A segment value and multiply by ratio.

Question 7