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The following data on a merger is given: Company A has 10 million shares with a market price of 75 cents and company B has

The following data on a merger is given: Company A has 10 million shares with a market price of 75 cents and company B has 7 million shares with a market price of 25 cents. Company A will be acquiring company B for a cash payment of R10 500 000. The expected synergy from this acquisition is expected to be R5 000 000. You are required to determine the NPV of the proposed take- over. (10 marks)

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