Answered step by step
Verified Expert Solution
Question
1 Approved Answer
SOLVE in EXCEL, go slow step by step pls and thanks (look at the image and not the scribbled text, in this question there are
SOLVE in EXCEL, go slow step by step pls and thanks
(look at the image and not the scribbled text, in this question there are 2 firms and we need to find the synergy gain from merger)
Firm A is considering a merger/acquisition with Firm B. Firm A: Market value of debt: $3 million Market value of equity: $5 million Number of shares: 0.2 million Firm B: Market value of debt: $5 million Market value of equity: $5 million Number of shares: 0.5 million Investment rate for the combined firm (bA+B): 50% WACC for the combined firm MACCA-B): 1096 Total net operating income before synergy gain: (X: S4 million Synergy rate (a): 5% Corporate tax rate (7: 40% Growth rate for the combined firm (g): 14.4% Number of years for the growth: 10 According to the Weston/Copeland model, what is the total synergy gain from the merger? Select one: a. $46.09 millioc b. $37.67 million c. $43.76 million d. $40.41 million Firm A is considering a merger/acquisition with Firm B. Firm A: Market value of debt: $3 million Market value of equity: $5 million Number of shares: 0.2 million Firm B: Market value of debt: $5 million Market value of equity: $5 million Number of shares: 0.5 million Investment rate for the combined firm (bA+B): 50% WACC for the combined firm MACCA-B): 1096 Total net operating income before synergy gain: (X: S4 million Synergy rate (a): 5% Corporate tax rate (7: 40% Growth rate for the combined firm (g): 14.4% Number of years for the growth: 10 According to the Weston/Copeland model, what is the total synergy gain from the merger? Select one: a. $46.09 millioc b. $37.67 million c. $43.76 million d. $40.41 millionStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started