Calculate the total present value of the synergy. Show calculations and state any necessary assumptions.

On 3 October 207. BBC announced that it has entered into a scheme implementation deed with XYZ whereby BBC will acquire all of the issued securities of XYZ via a scheme of arrangement. Consideration: 0.6BBC shares for 1XYZ shares Use the following information to answer the questions below. Before merger announcement: The merger will result in revenue enhancing synergies. Based on your analysis, the earnings of the combined entity will be 15% higher than the sum of the earnings of the target and the acquirer as independent entities. AP/E ratio of 20 is believed to be appropriate for valuing the merged entity