The following represents the target's accounting data you have estimated for the years $2024-2025.$ Assume that all of these numbers are end$-$of$-$year

data $($i$.$e$.$ today is January $1^{st},2024$ and the revenues, etc. are at the end of $2024,2025).$

In addition, you have the following information for the target and the acquiring firm.

$(1)(15$ points$)$ Calculate the appropriate cashflows.

$(2)(10$ points$)$ Calculate the appropriate discount rate for the acquiring firm based on the value of the target.

$(3)(5$ points$)$ Why is this rate so high?

$(4(15$ points$)$ Calculate the target firm value.

$(3(5$ points$)$ What would be a reasonable offer $($i$.$e$.\frac{\text{\$}}{?}$ share$)$ for the target.

$6(5$ points$)$ Explain why the cost of equity is used as the discount rate.

$(7(5$ points$)$ Explain why the retained earnings are subtracted to arrive at the appropriate cash flow.

$8(10$ points$)$ Explain why we de$-$lever and re$-$lever the ${}_L.$

$(9(5$ points$)$ What tax rate do we use to derive the cash flows? Why?

$(10(10$ points$)$ List at least three weaknesses of the analysis.

$(11(5$ points$)$ Why is the covariance of debt and the market equal to zero? What impact does this have on beta?

$(10$ points$)$ Explain how having only $50\%$ of $M$&$A$ s succeed a means of iustifving the efficient market hypothesis.