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Mega Pharma, Inc. (MPI) is considering merging with a smaller, independent company, SuperDrug, Ltd. (SDL). Using the appropriate discount rate of 12%, the analysts at
Mega Pharma, Inc. (MPI) is considering merging with a smaller, independent company, SuperDrug, Ltd. (SDL). Using the appropriate discount rate of 12%, the analysts at MPI have determined that the present value of the total incremental cash flows resulting from the possible merger would be $335.665 million.SDL's 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?
a.$61.03
b.$57.78
c.$55.25
d.$55.94
e.$6.08
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