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Delta Limited plans to acquire Gamma Limited. Delta Limited plans to propose a cash offer by paying the market price of Gamma shares as well

Delta Limited plans to acquire Gamma Limited. Delta Limited plans to propose a cash offer by paying the market price of Gamma shares as well as paying 30% of synergy created in the market value of assets. This deal expects to generate synergy of additional $50,000 of market value of assets and $30,000 of net income. Assume there is no transaction cost, financial and operating risk remain constant.
Share price is $5 and $2 of Delta Limited and Gamma Limited respectively.
Shares outstanding are 20,000 and 6,000 of Delta Limited and Gamma Limited respectively.
Market value of assets are $250,000 and $50,000 of Delta Limited and Gamma Limited respectively.
Net Income is $200,000 and $60,000 of Delta Limited and Gamma Limited respectively.
Calculated market value of assets of Delta Limited after acquisition.
- Answer 1: 50,000
- Answer 2: 323,000
- Answer 3: 250,000
- Answer 4: 350,000

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