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Charlie offers to buy all Hera outstanding common stock for $800 million, believing that Hera is worth $650 million. Delta uses an internal rate of
Charlie offers to buy all Hera outstanding common stock for $800 million, believing that Hera is worth $650 million. Delta uses an internal rate of return of 7% on all investment and financing decisions, and plans to issue $700 million in new debt to finance the deal. If Charlie believes the numbers make financial sense, what minimum synergistic benefits must be estimated to exist in this deal?
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