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Consider the following acquistion data regarding Washington Compary and Purple Turtle Corp.: Washington Company is considering an acquisition of Purple Turtle Corp. Washington Company estimates that acquing Purple furte will result in incremental value for the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company. Purple Turtle is a publidy traded company, and its market-determined pre-merger beta is 1.60. You alko have the following informstion about the company and the projected statements. - Purple Turtle currently has a $12.00 million market value of equity and $7.60 million in debt. - The risk-free rate is 5% with a 7.10% market risk premium, and the Capital Asset Pricing Model produces a pre-merper requred rate of return on equity rat, $16.36%. - Purple Turtle's cost of debt is 7.00% at a tax rate of 30%. - The projections assume that the company will have a post honzon growth cate or 4,00% - Current total net operating capital is $102.0 million, and the sum of existing debt and debt recuirco to maintain a constare capital structure at the time of acquisition is $31 million. - The firm has no nonoperating assets, such as marketable securities. - The projections assume that the compary will have a post-horizon growth rate of 4,00%. - Current total net operating capital is $102.0 malion, and the sum of existing debt and debt required to maintain a constant capital structure at the time of acquisition is $31 malion - The firm has no nonoperating assets, such as marketoble securities. With the given information; use the free cash flow to equity (fCrt) approach to calculate the following values involved in the merger analysis. (Note: Round your answer to two decimal places.) The estimated value of Purple Turte's operations after the merger is than the market value of Purple Turtle's equity. This means that the wealth of Purgle Turtle's shareholders will if it merges with Washington rather than remaining as a stand-alone corporation. True or False; The horzon value in the FCFE approach is dilferent from the horizon value in the adjusted present value (ApV) approach. The horizon value in the FCFE approach is only for equity, whereas the horizon value in the APV approach is for the total value of operations. False True