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Microsoft is considering acquiring a startup firm for $360 million which is a 20% premium over the equity value of the target, pre-acquisition. The synergistic

Microsoft is considering acquiring a startup firm for $360 million which is a 20% premium over the equity value of the target, pre-acquisition. The synergistic benefits are expected to equal zero in the first three years and then is expected to equal $20 million in year 4. The synergistic benefit in year 4 ($20 M) is expected to grow by 3% per year in perpetuity and the appropriate required return is 13% per year. Provide an equation


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