Question
Acquisition Company is considering buying Target Company. Acquisition expects it can increase Target Company's EBIT x (1-t) by $141,000 in perpetuity. Acquisition expects to pay
Acquisition Company is considering buying Target Company. Acquisition expects it can increase Target Company's EBIT x (1-t) by $141,000 in perpetuity. Acquisition expects to pay a total premium of $1468,000 to acquire the shares. If Acquisition Company has a WACC of 10% and Target Company has a WACC of 12%, what is the expected value creation in Target Company?
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Restaurant Financial Management
Authors: Hyung-il Jung
1st Edition
1774631431, 978-1774631430
