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Firm A has a value of $ 1 0 0 million and Firm B has a value of $ 6 0 million. Merging the two

Firm A has a value of $

100

million and Firm B has a value of $

60

million. Merging the two would enable cost savings with a present

value of $

20

million. Firm A purchases Firm B for $

65

million. How

much do Firm A

'

s shareholders gain from this merger?

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