Module 4 Quiz TOTAL POINTS 15 Is the following statement true or false Despite the posters loy part of the meires total profits. 2 A CFO is considering an acquisition of a target that is currently worth a billion dollars. The is expected to begin in two years and to grow at the rate of inflation (assume it is 156% in addition. Assume the integration cost will occur one year from now . The current discount rate of the acquirer The NPY of the synergies associated with this acquisition is _ 480 million 725 million ses mition is expected to begin in two years and to grow at the rate of inflation assume it is, 1961 in addition. Assume the integration cost will occur ance year from now. The current acount rate of the acquired price to offer to the target? O 3.1 billion 3.25 billion the same industry whose equity is worth 41 bilion dollars. The synergies associated with the How much should the acquirer pay for the target in this case ? Whatever Is necessary to get the deal done. O Less than at billion dollars Between 41 and 75 bilion dollars Between 41 and 50 bilion dollars A company hist .whose equity is worth 41 bation dollars. The synergies associated with the merger have been estimated to be equal to 9 billion dollars." Suppose that the acquirer has 4 billion shares outstanding, and the target has 5 billion shares acquirer stock price will stay at 18.75 dollars a share. What should be the exchange ratio for this 1.875 shares of the acquirer for each target share O o.4a shares of the acquirer for each target share O 0.53 shares of the acquirer for each target share O 1 share of the acquirer for each target share Almeida and partners (a private equity firm) is considering a LBO of Example Inc, which has an partners has 1.58 in cash to finance the deal and is planning to finance the rest with a new bank will assume all the existing debt of Example inc. (existing debt is equal to 28). Example Inc. has ne his deal is equal to_ 105 billion O 10 bron 12 bmon Sensitivity sis ample What happens to the NPV The IRR goes to 7.294, and the MPV goes to $-3.756. The IRR goes to 7.296, and the NPY goes to $.1.235. O The IRR goes to 5.79, and the MPV goes to $-3.756. The IRR Is unchanged, and the NPV goes to 5-1.235. 32 domars you should reject the project because there is a significant chance that the NPV was be O True the 10-year government bond yield is at and the market risk premium is 5k. . Your company's required return on debt is cy. its tax rate is aott, and les required return on castty Is 101. The compenshere and the company has's billion shares outstanding the came The space You don't 1. Consider the follows Balance sheet Other current at income statement 12 consider the follow Balance sheet 1 1 11 Balance sheet as of collars. Other current amos s. is the following statement true or false The negative EVA shows that the con