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A rights offering that gives existing target shareholders the right to buy shares in either the target or an acquirer at a deeply discounted price once certain conditions are met is called a ________.

Savings that come from combining the marketing and distribution of different types of related products are called ________.

You work for a levered buyout firm and are evaluating a potential buyout of TTUN Inc. TTUN’s stock price is $20, and it has 4 million shares outstanding. You believe that if you buy the company and replace its dismal management team, its value will increase by 40%. You are planning on doing a levered buyout of TTUN and will offer $25 per share for control of the company. Will shareholders sell their shares and how much equity will you own if improvements are made?

Brutus Co. expects an EPS of $10 per share next period. Currently, their plowback ratio is 0.5. However, the company has the opportunity to finance a new project that will earn an ROE of 12% by cutting its dividend to $2.50 per share. If the Brutus Co’s expected stock return is 9%, should they cut dividends to make the new investment?

Corporate payout policy refers to:

Brutus Manufacturing has earnings per share (EPS) of $2.00, 4 million shares outstanding, and a share price of $30.  Brutus is considering buying Fisher Industries, which has earnings per share of $1.80, 2 million shares outstanding, and a share price of $15. Brutus will pay for Fisher by issuing new shares. There are no expected synergies from the transaction. If Brutus pays no premium to acquire Fisher, what will the earnings per share be after the merger?

Assume Brutus Co. has $20 million in excess cash and no debt. The firm expects to generate additional free cash flows of $48 million per year in subsequent years which they can pay out as a dividend. If Brutus’s unlevered cost of capital is 12%, then the enterprise value of its ongoing operations is PV(FCFs) = $48 million/12% = $400 million.Brutus’s board is meeting to decide how to pay out its $20 million in excess cash to shareholders. The board is considering two options: 1) Use the $20 million to pay a $2 cash dividend for each of Brutus’s 10 million outstanding shares2) Repurchase shares instead of paying a dividend In perfect capital markets, which would investors prefer?

Assume Brutus Co. has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $60 million per year in subsequent years which they can pay out as a dividend. If Brutus’s unlevered cost of capital is 15%, then the enterprise value of its ongoing operations is PV(FCFs) = $60 million/15% = $400 million.Brutus’s board is meeting to decide how to pay out its $50 million in excess cash to shareholders. The board is considering two options: 1) Use the $50 million to pay a $5 cash dividend for each of Brutus’s 10 million outstanding shares2) Repurchase shares instead of paying a dividend In perfect capital markets, which would investors prefer?

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A firm has a total market value of assets of $300 million that includes $60 million of cash and 8 million shares outstanding. If the firm uses $30 million of its cash to repurchase shares, what is the new price per share? (Assume perfect capital markets.)