Simple Merger Model

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Merger Modeling Basics: EPS x Net Income
Hi, I have a doubt in relation to EPS and Net Income used in the model: why does the instructor mention that the multiplication of the EPS by the # of diluted shares outstanding to come to the Net Income is not accurate/precise? Also, if we are building a stand alone DCF valuation model that may ... Read More
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added 10 years ago
Merger Modeling Basics: Synergies and Cash PE question
Hi there, Here is my question: Why are we calculating the Purchase price (Equity Value) in this model based on the target's Net Income affected by synergies? If we look at the Accretion / Dilution model, we calculated the implied PE based on the Purchase price and target's EPS (without any synerg... Read More
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added 10 years ago
Merger Modeling Basics: Synergies and Cash PE question
Hi there, Here is my question: Why are we calculating the Purchase price (Equity Value) in this model based on the target's Net Income affected by synergies? If we look at the Accretion / Dilution model, we calculated the implied PE based on the Purchase price and target's EPS (without any synerg... Read More
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added 10 years ago
Merger Modeling Basics: Amortization
Hi, I was analysing the ability to pay model once more and came out with the following doubt: in theory, our sensitivity table shows how much I can afford to pay at a given Pre-tax cost of debt and a given level of synergy, however I simulated one $ amount from that table and got a dilution in my... Read More
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added 10 years ago
Merger Modeling Basics: Questions on Merger model
Hi, I have a couple of questions in relation to this module that I will need your assistance to understand: (1). I'm confused with the GW calculation. In our "Accretion Dilution Model" we did it one way (P. price - book value). While in this module, we did: P. price - book value + transaction fee... Read More
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added 10 years ago
Merger Modeling Basics: 338(h)10 election
Hi there, In a 338(h)10 election deal structure, where we don't need to amortize the "GW" but we still have the tax credit, should we apply the tax credit to the difference between Purchase Price - Book Value ONLY, or the tax credit goes over Purchase Price - Book Value + Transaction fees? In oth... Read More
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added 10 years ago
Merger Modeling Basics: About the Cash balance on target
Hi there, In our model we assume that the Target's current debt is refinanced. As such, we set our Debt and Equity financing to the Target's Enterprise Value. By doing that we're saying that from the Target's existing Total Debt of $50m, we are refinancing it using: $22.5m equity (as per the 50% ... Read More
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added 10 years ago
Merger Modeling Basics: 2005E vs 2004A
Hi,

This might be a dumb question:
Why are we using the 2005E for EPS, PE, and net income but SGA from 2004A?
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added 10 years ago
Merger Modeling Basics: the question about the Fees
I have question about the place we can add the deal fees on the pro forma statement, in your presentation, you simply added the fees on the acquiring firm's pro forma debt balance, why you cann't split up the amount, put 50% of the fees on debt and 50% on equity. great thanks.
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added 10 years ago