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Instructions

Copyright 2009 McGraw-Hill/Irwin

Spreadsheet Templates

Fundamentals of Corporate Finance, 6th Edition

Challenge Problem 14

MAIN MENU -- Chapter 21

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Fundamentals of Corporate Finance Main MenuSixth Edition

Instructions

Navigating the Workbook Top

CTRL+PAGE DOWN: Moves you to the next sheet in the workbook.

Entering your information Top

For each question, you will see the following lists and boxes:

Student Name:Course Name:Student ID:Course Number:

Enter your information in these cells before submitting your work.

Entering data Top

Each chapter of the spreadsheets to accompany Fundamentals of Corporate Financecontains links to help you navigate the workbook. These hyperlinks help you

problem from the chapter that contains the Excel icon. From the Main Menu,click on the question you wish to complete. You can always return to the mainmenu by clicking on the link located in the upper right corner of each worksheet.

You can move quickly around an Excel workbook by selecting the worksheet tabat the bottom of the screen. Each worksheet in an Excel workbook will have its own

move around the workbook quickly. The Main Menu contains links to each

CTRL+PAGE UP: Moves you to the previous sheet in the workbook.

Navigating the WorkbookEntering your informationEntering dataPrinting

Another way to move quickly around an Excel workbook is by using the followingkeyboard shortcuts:

tab. In the spreadsheets to accompany Fundamentals of Corporate Finance, you will

see a separate tab for each problem, along with the Main Menu, Instructions andHelp Topics worksheets.

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Student Name:Course Name:Student ID:Course Number:

Use the data in the table below and enter the indicated formulas to complete the requirements of this problem.

Leisure Products PlastitoysForecast EPS $5.00 $1.50Forecast DPS $3.00 $0.80Shares 1,000,000 600,000

Price per share $90.00 $20.00

Current growth 6%Merged growth 8%

a) Expected return on Plastitoys FORMULAPrice per share of Plastitoys post merger FORMULAValue of the combined firm FORMULACost of acquisition FORMULAGain from acquisition #VALUE!

b) Total cost FORMULALess gain FORMULANet cost #VALUE!

c) Number of shares of Leisure Products to be offered FORMULAShare outstanding after merger FORMULAValue of merged firm FORMULAPrice per share of merged firm #VALUE!Cost of merger FORMULA

d) Value of Plastitoys after Merger FORMULATotal shares FORMULAShare price #VALUE!Cost of merger FORMULA

Challenge Problem 14: Merger Gains and CostsChapter 21

Copyright 2009 McGraw-Hill/Irwin