HAWK Inc. who is a publicly traded company is considering acquiring EAGLE Inc. which is a private company. Please use the information and methods taught to you in class and construct an NPV analysis. Your conclusion should state whether this acquisition is a good idea. Remember that you should first find the price of EAGLE Inc using the appropriate WACC and then evaluate the acquisition from HAWKs perspective as an investment. The next page includes the information you are provided.

	HAWK	EAGLE
Debt/Equity	2/3	1/3
Tax Rate	15%	15%
Beta	2.3	N/A
S&P 500 Return	15%	15%
10-year T-Bond	2%	2%
Growth Rate	4%	6%
Cost of Debt	See Bond info	5%
Anticipated FCFs for EAGLE
Year 1	$540,000
Year 2	($120,000)
Year 3	$220,000
Year 4	$300,000
Year 5	$310,000
Comparable Companies to EAGLE Inc
	Debt (in millions)	Equity (in millions)	Stock Price (market)	# Shares Outstanding	Beta
Company A	30	30	$5	8,000,000	1.3
Company B	10	50	$7	11,000,000	1.1
Company C	50	80	$10	7,000,000	3.0
Company D	35	20	$2	9,000,000	2.5
Bond Information for HAWK Inc.
Price	$950
Face Value	$1,000
Years to Maturity	12
Coupon Rate	10%	Paid monthly