Calculate the equity value for a public target in a precedent transactions analysis given the following information.

Details:
Share price: $20.00
Acquirer's offer price per share: $40.00
Fully diluted shares outstanding: 100.00mm

Question

Quizplus · Accepted Answer

To calculate the equity value in a precedent transactions analysis, we use the acquirer's offer price per share and multiply it by the fully diluted shares outstanding. 
Equity value = offer price per share x fully diluted shares outstanding 
Equity value = $40.00 x 100.00mm 
Equity value = $4,000.00mm 
Since we want to find the equity value for the target, we need to subtract the target's debt and minority interests if any. Assuming the target has no debt or minority interests, the equity value for the target would be the same as the equity value calculated above, which is $4,000.00mm or $400.00mm (rounded to the nearest million). Therefore, the correct answer is B.

Calculate the Equity Value for a Public Target in a Precedent