5 points You are leading a team on a M&A deal. Suddenly your analyst has disappeared and you have the following unfinished spreadsheet. The acquirer and the target are assumed to have zero growth. Now it is up to you to finish this job. You also believe that the tax rate will be 20% when this merger closes, so you are using 20% as the corporate tax rate in this calculation. Antw Acquirer Target Combined Sales 500 120 620 200 60 260 Operating Expenses Annual cost savings 40 EBIT 300 717 EBIT(1-1) 240 18 18 48 Depreciation 40 20 ISIRS ??? 30 40 ??? Gross Plant & Equipment 10 un 5 772 Change in Working Capital Free Cash Flow to Firm 240 23 722 8.00% 996 896 Discount rate 3000 255.56 Firm Value 27? 1000 100 1100 Long term debt 2000 155.56 237 Equity value 240 23 ?2? Free Cash Flow to Firm Discount rate 8.00% 9% 8% Firm Value 3000 255.56 ??? Long term debt 1000 100 1100 Equity value 2000 155.56 ?3? ?1? is 22? is 73? is The synergy of this merger is The maximum offer you can make is