Question 2 Answer the question You are the Financial Director for Welike Sdn Bhd, a kitchen designing company and planning on making a bid to take over Theylike Sdn Bhd, a renovation company. You have estimated the cash flow after synergy merging. The current debt for Theylike Sdn Bhd is RM40 million. Year After-tax ( before interest) cash flow in million 80 70 2 3 4 forever 5 120 90 85 The cost of equity is provided below: Risk free rate = 3% Beta = 1.6 Market return=7.4% Required: (a) Compute and comment on company bid value. (b) indicate the type of merging and the THREE (3) benefits of merging. (6 marks) (4 marks) [Total 10 marks ] Question 2 Answer the question You are the Financial Director for Welike Sdn Bhd, a kitchen designing company and planning on making a bid to take over Theylike Sdn Bhd, a renovation company. You have estimated the cash flow after synergy merging. The current debt for Theylike Sdn Bhd is RM40 million. Year After-tax ( before interest) cash flow in million 80 70 2 3 4 forever 5 120 90 85 The cost of equity is provided below: Risk free rate = 3% Beta = 1.6 Market return=7.4% Required: (a) Compute and comment on company bid value. (b) indicate the type of merging and the THREE (3) benefits of merging. (6 marks) (4 marks) [Total 10 marks ]