Question
Nvidia is considering the purchase of ARM Inc. which is currently a supplier for Nvidia and the acquisition would allow Nvidia to better control its
Nvidia is considering the purchase of ARM Inc. which is currently a supplier for Nvidia and the acquisition would allow Nvidia to better control its supply.
The current cash flow from assets for ARM is $7.7 million.
The cash flows are expected to grow at 6% for the next 5 years before leveling off to 3% for the indefinite future.
The costs of capital for Nvidia and ARM are 10% and 8%, respectively.
ARM currently has 3 million shares of stock outstanding and $25 million in debt outstanding.
What is the maximum price per share Nvidia should pay for ARM?
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Managing Risk And Uncertainty A Strategic Approach
Authors: Richard Friberg
1st Edition
0262528193,026233156X
