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Pinder Ltd has announced a cash offer to acquire Value Co. Pinder Ltd's shares are trading at $15 and there are 2 million shares of
Pinder Ltd has announced a cash offer to acquire Value Co. Pinder Ltd's shares are trading at $15 and there are 2 million shares of outstanding. Value Co's shares are trading at $5 and there are 1 million shares outstanding. Pinder Ltd estimates that the acquisition will incur integration costs of $250,000 per year for the first three years. Pinder Ltd expects to be able to reduce overlapping capital expenditures by $650,000 during the first five years of the acquisition. The required rate of return for Pinder Ltd is 10%. Assume cash flows occur at the end of each year. Based only on the information above, what is the maximum price Pinder Ltd can offer before destroying shareholder value? (round to the nearest two decimal places) O $6.73 $6.55 O $6.84 None of the other answers. O $6.50
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