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Neither acquiring firm A nor target firm B has any debt. The incremental value of the proposed acquisition is estimated to be $100,000. Firm B
Neither acquiring firm A nor target firm B has any debt. The incremental value of the proposed acquisition is estimated to be $100,000. Firm B is willing to be acquired for $16 per share in cash.
Number of Shares 50,000 25,000
Price per Share $35 $13
(a) What are the synergistic benefits that arise from the acquisition of firm B?
(b) What is the Merger premium per share in this case?
(c) What is the Value of firm B to firm A?
(d) What is the NPV for acquiring firm B?
(e) What is the price per share of the merged firm after the acquisition is completed?
(c) What is the value of firm A to firm B?
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Focus On Personal Finance An Active Approach To Help You Develop Successful Financial Skills
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
4th Edition
0078034787, 978-0078034787
