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Question 13 O pts Problem G A Corp, has decided to acquire T Corp. A Corp, has 50 million shares outstanding, each trading at $30
Question 13 O pts Problem G A Corp, has decided to acquire T Corp. A Corp, has 50 million shares outstanding, each trading at $30 per share before the surprise acquisition announcement. T Corp. has 25 million shares outstanding, each trading at $30 per share before the acquisition announcement. The acquisition will result in cost savings of $8 million per year forever. The discount rate for cost savings is 10%. The acquisition will also involve transaction costs of $10 million. The announcement said that A will buy Tin a stock swap transaction at a premium of 5% based on pre-merger prices. What will be the share prices of the two firms immediately after the announcement? [10 points] Question Code: 7.176 Ignore the box below. Use the space in the following question to type your
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