Problem 1.2. We are considering the take-over of a company which in our opinion is over-investing in R\&D activities. The company has 1 million shares outstanding and each share is currently priced at SEK 0.5; all monetary amounts are expressed in thousands of Swedish Crowns. According to our expectations, under our plans, in the first five years after the hypothetical take-over, the slower pace of R\&D would increase the company's yearly cash-flows by SEK 20000 . The downsizing of R\&D activities will also cause a perpetual drop of the company's yearly cash-flows by SEK 7000 , starting at the end of year six. The future cash-flows are discounted at the yearly rate of 8%. Which increase in the company value could be realised, if such estimates were correct? What would be the new share price, if the take-over were finalised? Problem 1.2. We are considering the take-over of a company which in our opinion is over-investing in R\&D activities. The company has 1 million shares outstanding and each share is currently priced at SEK 0.5; all monetary amounts are expressed in thousands of Swedish Crowns. According to our expectations, under our plans, in the first five years after the hypothetical take-over, the slower pace of R\&D would increase the company's yearly cash-flows by SEK 20000 . The downsizing of R\&D activities will also cause a perpetual drop of the company's yearly cash-flows by SEK 7000 , starting at the end of year six. The future cash-flows are discounted at the yearly rate of 8%. Which increase in the company value could be realised, if such estimates were correct? What would be the new share price, if the take-over were finalised