chart blanks

1: 260

2: 151

3: 1887.5

4: 1437.5

Please help with questions 12-16

You are leading a team on a M&A deal. Suddenly your analyst has disappeared and you have the following unfinished spreadsheet. The acquirer and the target are assumed to have zero growth. Tax rate is 40%. Now it is up to you to finish this job. Acquirer Target Combined Sales 400 500 100 200 60 260 Operating Expenses Annual cost savings 20 EBIT 200 40 120 24 772 40 30 772 30 30 777 EBIT(1 - 1) Depreciation Gross Plant & Equipment Change in Working Capital Free Cash Flow to Firm 10 5 772 120 19 722 Discount rate 9% 8% 8.00% 1500 Firm Value 211.111 232 Long term debt 400 50 450 Equity value 1100 161.111 742 12. What is the synergy of this merger? 176.389 QUESTION 13 13. What is minimum price to offer? QUESTION 14 14. Suppose you decide to share 30% of the synergy to the target shareholders, what is your initial offer? 214.03 QUESTION 15 15. What is the maximum price you can offer? QUESTION 16 16. If the tax rate drops from 40% to 22% and everyting else stays the same, the synergy from this merger will increase. True False