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Azianca PLC is in the process of acquiring Nabila PLC, both companies are listed on Zysynius Stock Exchange (ZSE) of Waonga Republic. The management of

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Azianca PLC is in the process of acquiring Nabila PLC, both companies are listed on Zysynius Stock Exchange (ZSE) of Waonga Republic. The management of Azianca PLC is seeking your financial advice on the following: 1. The current shure price of Nabila PLC is K4 with expected rate of return hovering around 13 percent. The yield on government bonds falls in the neighbourhood of 7 percent, and expected return on ZSE is 15 percent. Due to the Covid-19 pandemic the covariance of Nabila's share price with ZSE is expected to double. Moreover, Nabila PLC is expected to pay a constant dividend indefinitely 2. Azianca PLC and Nabila PLC operate in the same Biotech industry of Waonga Republic. The Biotech industry comprises of the following firms with their respective market shares: (i) Azianca PLC with 30 percent. (ii) Nevo Biotech with 25 percent, (ii) Liano Pharm Inc with 20 percent, (iv) Nabila PLC with 20 percent, and (iv) RunyaX Therapeutics with 5 percent, 3. Nabila PLC is currently facing allegation of malpractices by senior management. A Whistleblower accused the CEO of engaging in buccaneer nepotism and cronyism, colloquially, this is locally called tribalism. REQUIRED: a) With clear elaborative calculations and notes, advice the management of Azianca PLC the fair price of Nabila PLC (24 marks) b) Using numerical analysis and rational reasoning, advise the management of Azianca PLC whether the acquisition of Nabila PLC is likely to be approved by the regulatory authorities. (8 marks) c) Through a Corporate Finance prism, what are the implications of nepotism and cronyism on Nabila PLC. And is corporate governance the panacea of this scourge. mark Azianca PLC is in the process of acquiring Nabila PLC, both companies are listed on Zysynius Stock Exchange (ZSE) of Waonga Republic. The management of Azianca PLC is seeking your financial advice on the following: 1. The current shure price of Nabila PLC is K4 with expected rate of return hovering around 13 percent. The yield on government bonds falls in the neighbourhood of 7 percent, and expected return on ZSE is 15 percent. Due to the Covid-19 pandemic the covariance of Nabila's share price with ZSE is expected to double. Moreover, Nabila PLC is expected to pay a constant dividend indefinitely 2. Azianca PLC and Nabila PLC operate in the same Biotech industry of Waonga Republic. The Biotech industry comprises of the following firms with their respective market shares: (i) Azianca PLC with 30 percent. (ii) Nevo Biotech with 25 percent, (ii) Liano Pharm Inc with 20 percent, (iv) Nabila PLC with 20 percent, and (iv) RunyaX Therapeutics with 5 percent, 3. Nabila PLC is currently facing allegation of malpractices by senior management. A Whistleblower accused the CEO of engaging in buccaneer nepotism and cronyism, colloquially, this is locally called tribalism. REQUIRED: a) With clear elaborative calculations and notes, advice the management of Azianca PLC the fair price of Nabila PLC (24 marks) b) Using numerical analysis and rational reasoning, advise the management of Azianca PLC whether the acquisition of Nabila PLC is likely to be approved by the regulatory authorities. (8 marks) c) Through a Corporate Finance prism, what are the implications of nepotism and cronyism on Nabila PLC. And is corporate governance the panacea of this scourge. mark

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