Question

Hastings corporation is interested in acquiring vandell corporation

Answer 1

Valuation Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 8%. ... Both Vandell and Hastings face a 40% tax rate.

Answer 2

Answer:

Hastings Corporation is interested in acquiring VandellCorporation. Vandell has 1 million shares outstanding and a targetcapital structure consisting of 30% debt; its beta is 1.50 (givenits target capital structure). Vandell has $9.48 million in debtthat trades at par and pays an 7.7% interest rate.