Question
Use the data contained in the case to estimate the post-merger cash flows for 2018 through 2022 assuming that Lexington General Hospital is acquired by
Use the data contained in the case to estimate the post-merger cash flows for 2018 through 2022 assuming that Lexington General Hospital is acquired by St. Joseph's Teaching Hospital. You have very limited data on which to base your forecasts. The key is to make supportable assumptions about the potential synergies that can be obtained from the merger. Also, any cost savings to St. Joseph's that result from the merger must be included in the analysis. (Hint: Use embedded interest expense in your forecast, but do not include any interest to fund the acquisition.)
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