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Provide answer in excel format. 1. Forecasts for Company A and Company B as standalone firms are given below. Company A has announced an acquisition
Provide answer in excel format.
1. Forecasts for Company A and Company B as standalone firms are given below. Company A has announced an acquisition of Company B, and estimates that 8,000 employees will be laid off by the completion date. Revenue synergies for the combined firm are forecasted to be 5 percent of projected combined standalone revenues. Company A also expects a second source of synergies, annual cost savings, of $400 thousand for Year 1 (growing thereafter at 3% ), projected post-merger operating margins at 12% of revenue, and growth in revenues for the combined firm at 3\% after Year 3. Assume a tax rate of 35 percent, a cost of capital (WACC) of 10 percent suitable for the cost and revenue synergiesStep by Step Solution
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