novell acquired wordperfect for 1.4 billion

nounced its plan to acquire WordPerfect Corporation for $1.4 billion. At the time of the acquisition, the relevan information on the two companies was as follows: Novell WordPerfect $1,200.00 $600.00 57.00% 75.00% $42.00 35.00% $75.00 40.00% $25.00 35.00% $40.00 30.00% Revenues Cost of Goods Sold (w/o Depreciation) Depreciation Tax Rate Capital Spending Working Capital (as % of Revenue) Beta Expected Growth Rate in Revenues/EBIT Expected period of High Growth Growth rate After High-Growth Period Beta After High-Growth period 1.45 25.00% 1.25 15.00% 10 years 10 years 6.004 6.00% 1.10 1.10 Capital spending will be offset by depreciation after the Nigh-growth period. Neither firm has any debt outstanding. The treasury bond rate is 7%. Assume that market risk premium is 5.5%. A. Estimate the value of Novell, operating independently. B. Estimate the value of WordPerfect, operating independently. C. Estimate the value of the combined firm, with no synergy. D. As a result of the merger, the combined firm is expected to grow 24% a year for the high-growth period. Estimate the value of the combined firm with the higher growth. e. What is the synergy worth? what is the maximum price that Novell can pay for Wordperfect? nounced its plan to acquire WordPerfect Corporation for $1.4 billion. At the time of the acquisition, the relevan information on the two companies was as follows: Novell WordPerfect $1,200.00 $600.00 57.00% 75.00% $42.00 35.00% $75.00 40.00% $25.00 35.00% $40.00 30.00% Revenues Cost of Goods Sold (w/o Depreciation) Depreciation Tax Rate Capital Spending Working Capital (as % of Revenue) Beta Expected Growth Rate in Revenues/EBIT Expected period of High Growth Growth rate After High-Growth Period Beta After High-Growth period 1.45 25.00% 1.25 15.00% 10 years 10 years 6.004 6.00% 1.10 1.10 Capital spending will be offset by depreciation after the Nigh-growth period. Neither firm has any debt outstanding. The treasury bond rate is 7%. Assume that market risk premium is 5.5%. A. Estimate the value of Novell, operating independently. B. Estimate the value of WordPerfect, operating independently. C. Estimate the value of the combined firm, with no synergy. D. As a result of the merger, the combined firm is expected to grow 24% a year for the high-growth period. Estimate the value of the combined firm with the higher growth. e. What is the synergy worth? what is the maximum price that Novell can pay for Wordperfect