BULL Inc. who is a publicly traded company is considering acquiring BEAR Inc. which is a private company. Please use the information and methods taught to you in class and construct an NPV analysis. You conclusion should state whether this acquisition is a good idea. Remember that you should first find the price of BEAR Inc using the appropriate WACC and then evaluate the acquisition from BULLs perspective as an investment. The next page includes the information you are provided.

Please use Table # 1,2,3 and 4

Table #1	BULL	BEAR
Debt/Equity	2/3	1/2
Tax Rate	20%	25%
Beta	2	N/A
S&P 500 Return	15%	15%
10-year T-Bond	2%	2%
Growth Rate	3%	5%
Cost of Debt	See Bond info	9%
Table #2 Anticipated FCFs for BEAR
Year 1	$540,000
Year 2	($120,000)
Year 3	$220,000
Year 4	$300,000
Year 5	$310,000
Table #3 Comparable Companies to BEAR Inc
	Debt (in millions)	Equity (in millions)	Stock Price (market)	# Shares Outstanding	Beta
Company A	30	30	$5	8,000,000	1.1
Company B	10	50	$7	11,000,000	1.5
Company C	50	80	$10	7,000,000	3.5
Company D	35	20	$2	9,000,000	2.1
Table #4 Bond Information for BULL Inc.
Price	$950
Face Value	$1,000
Years to Maturity	8
Coupon Rate	10%	Paid semi-annually