1. Purchase price premiums contain a synergy premium and a control premium. The control premium represents the amount an acquirer is willing to pay for the right to direct the operations of the target firm. Assume that Cliffs would not have been justified in paying a control premium for acquiring Alpha. Consequently, the Cliffs’

offer price should have reflected only a premium for synergy. According to Table 9–9, did Cliffs overpay for Alpha? Explain your answer.