Question
Three Guys Burgers, Inc., has offered $19 million for all of the common stock in Two Guys Fries, Corp. The current market capitalization of Two
Three Guys Burgers, Inc., has offered $19 million for all of the common stock in Two Guys Fries, Corp. The current market capitalization of Two Guys as an independent company is $15 million. Assume the required return on the acquisition is 9 percent and the synergy from the acquisition is a perpetuity. What is the minimum annual synergy that Three Guys feels it will gain from the acquisition?
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Principles Of Corporate Finance
Authors: Lawrence J. Gitman, Sean M. Hennessey
2nd Canadian Edition
0321452933, 978-0321452931
