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Corporation A is analyzing the possible acquisition of Corporation B. Both firms have no debt. Corporation A believes the acquisition will increase its total aftertax

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Corporation A is analyzing the possible acquisition of Corporation B. Both firms have no debt. Corporation A believes the acquisition will increase its total aftertax annual cash flows by $2.4 million indefinitely. The current market value of Corporation B is $92 million, and that of Corporation A is $142.3 million. The appropriate discount rate for the incremental cash flows is 10 percent. Corporation A is trying to decide whether it should offer 40 percent of its stock or $109 million in cash to Corporation B shareholders. The cost of the cash alternative is while the cost of the stock alternative is A) $92,000,000; $109,000,000 B) $109,000,000; $103,320,000 C) $92,000,000; $91,338,092 D) $92,000,000; $90,824,141 E) $109,000,000; $104,021,818

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