We learned that Facebook acquired GIPHY for a sum of $400 million. Facebook has historically maintained its

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We learned that Facebook acquired GIPHY for a sum of $400 million. Facebook has historically maintained its WACC at around 8%. Assume that Facebook acquired another app this year for $500 million and this acquisition is expected to generate $20 million a year in perpetuity. Calculate the NPV of this new project using an 8% discount rate. How much value could this investment create or destroy for Facebook?

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Principles Of Managerial Finance

ISBN: 9781292400648

16th Global Edition

Authors: Chad Zutter, Scott Smart

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