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MDI Corporation is considering merging with a smaller independent company, SDL Corporation. Using the appropiate discount rate of 12%, the analysts have determined that the
MDI Corporation is considering merging with a smaller independent company, SDL Corporation. Using the appropiate discount rate of 12%, the analysts have determined that the present value of the incremental cash flows resulting from the merger is $335.665 million. SDLs current market price is $50.25 and the firm has 5.5 million shares outstanding. What is the maximum price per share that MPI should offer to purchase SDL
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