Part A You have been asked to analyze the synergy in a merger of two small banks, and have been provided the following information on both banks. in 2023 A B EBIT(1-t) -- a.k.a. NOPAT $144.00 $250.00 Book value of Capital $1,200.00 $2,500.00 Beta 1.00 1.00 Both firms are in stable growth and are growing 6% a year. The merger is motivated entirely by cost savings. The 10-year treasury bond rate is 6%. Both banks have tax rates of 40%. Market index return is 11.5%. a. Estimate the value of bank A. b. Estimate the value of bank B. c. If the combined bank will save $ 50 million a year in operating expenses (generate 50 million more EBIT) starting right away in 2024, estimate the value of synergy. d. If the savings will not begin until four years from now i.e. 2028, estimate the value of the synergy. Part B Explain why the valuation methods for cross-boarder acquisation is different from the valuation methods for domestic acquisition. Part A You have been asked to analyze the synergy in a merger of two small banks, and have been provided the following information on both banks. in 2023 A B EBIT(1-t) -- a.k.a. NOPAT $144.00 $250.00 Book value of Capital $1,200.00 $2,500.00 Beta 1.00 1.00 Both firms are in stable growth and are growing 6% a year. The merger is motivated entirely by cost savings. The 10-year treasury bond rate is 6%. Both banks have tax rates of 40%. Market index return is 11.5%. a. Estimate the value of bank A. b. Estimate the value of bank B. c. If the combined bank will save $ 50 million a year in operating expenses (generate 50 million more EBIT) starting right away in 2024, estimate the value of synergy. d. If the savings will not begin until four years from now i.e. 2028, estimate the value of the synergy. Part B Explain why the valuation methods for cross-boarder acquisation is different from the valuation methods for domestic acquisition. Part A You have been asked to analyze the synergy in a merger of two small banks, and have been provided the following information on both banks. in 2023 A B EBIT(1-t) -- a.k.a. NOPAT $144.00 $250.00 Book value of Capital $1,200.00 $2,500.00 Beta 1.00 1.00 Both firms are in stable growth and are growing 6% a year. The merger is motivated entirely by cost savings. The 10-year treasury bond rate is 6%. Both banks have tax rates of 40%. Market index return is 11.5%. a. Estimate the value of bank A. b. Estimate the value of bank B. c. If the combined bank will save $ 50 million a year in operating expenses (generate 50 million more EBIT) starting right away in 2024, estimate the value of synergy. d. If the savings will not begin until four years from now i.e. 2028, estimate the value of the synergy. Part B Explain why the valuation methods for cross-boarder acquisation is different from the valuation methods for domestic acquisition. Part A You have been asked to analyze the synergy in a merger of two small banks, and have been provided the following information on both banks. in 2023 A B EBIT(1-t) -- a.k.a. NOPAT $144.00 $250.00 Book value of Capital $1,200.00 $2,500.00 Beta 1.00 1.00 Both firms are in stable growth and are growing 6% a year. The merger is motivated entirely by cost savings. The 10-year treasury bond rate is 6%. Both banks have tax rates of 40%. Market index return is 11.5%. a. Estimate the value of bank A. b. Estimate the value of bank B. c. If the combined bank will save $ 50 million a year in operating expenses (generate 50 million more EBIT) starting right away in 2024, estimate the value of synergy. d. If the savings will not begin until four years from now i.e. 2028, estimate the value of the synergy. Part B Explain why the valuation methods for cross-boarder acquisation is different from the valuation methods for domestic acquisition