Widget Corp., which is considering the acquisition of Global Satellite Corp. (GSC), estimates that acquiring GSC will result in an incremental value fo the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company: Global Satellite Corp. (GSC) is a publicly traded company, and its market-determined pre-merger beta is 1.00 , You also have the following informatio about the company and the projected statements: - GSC currently has a $38.00 million market value of equity and $24.70 million in debt. - The risk-free rate is 3.5%, there is a 5.60% market risk premium, and the Capital Asset Pricing Model produces a pre-merger required rate of return on equity ral, of 9.10%. - GSC's cost of debt is 5.50% at a tax rate of 30%. - The projections assume that the company will have a post-horizon growth rate of 5.50%. - Current total net operating capital is $104.0, and the sum of existing debt and debt required to maintain a constant capital structure - The projections assume that the company will have a post-horizon growth rate of 5.50%. - Current total net operating capital is $104.0, and the sum of existing debt and debt required to maintain a constant capital structure at the time of acquisition is $32 million. - The firm does not have any nonoperating assets such as marketable securities. Given this information, use the adjusted present value (APV) approach to calculate the following values involved in merger analysis. (Note: Only round intermediate calculations when entering them as a final answer.) Thus, the total value of GSC's equity is Suppose Widget Corp. plans to use more debt in the first few years of the acquisition of Global Satelite Corp. (GSC) Assuming that using more debt will not lead to an increase in bankruptcy costs for Widget Corp., the interest tax shields and the value of the tax, shield in the analysis, will Suppose Widget Corp. plans to use more debt in the first few years of the acquisition of Global Satellite Corp. (GSC) Assuming that using more deb will not lead to an increase in bankruptcy costs for Widget corp., the interest tax shields and the value of the tax shield in the analysis, will , leading to a value of operations of the acquired firm. The APV approach is considered useful for valuing acquisition taroets, because the mothod involves finding the values of the untevered firm and the interest tax shield separately and then summing those values. Why is it difficult to value certain types of acquisitions using the corporate valuation model? The acquiring firm immediately retires the target firm's old debt. Thus, the acquisition deal consists of only new debt in its capitat structure. The acquiring firm usually assurnes the debt of the target firm. Thus, old debt with difforent coupon rates uscally becomes a part of the acquisition deal. Widget Corp., which is considering the acquisition of Global Satellite Corp. (GSC), estimates that acquiring GSC will result in an incremental value fo the firm. The analysts involved in the deal have collected the following information from the projected financial statements of the target company: Global Satellite Corp. (GSC) is a publicly traded company, and its market-determined pre-merger beta is 1.00 , You also have the following informatio about the company and the projected statements: - GSC currently has a $38.00 million market value of equity and $24.70 million in debt. - The risk-free rate is 3.5%, there is a 5.60% market risk premium, and the Capital Asset Pricing Model produces a pre-merger required rate of return on equity ral, of 9.10%. - GSC's cost of debt is 5.50% at a tax rate of 30%. - The projections assume that the company will have a post-horizon growth rate of 5.50%. - Current total net operating capital is $104.0, and the sum of existing debt and debt required to maintain a constant capital structure - The projections assume that the company will have a post-horizon growth rate of 5.50%. - Current total net operating capital is $104.0, and the sum of existing debt and debt required to maintain a constant capital structure at the time of acquisition is $32 million. - The firm does not have any nonoperating assets such as marketable securities. Given this information, use the adjusted present value (APV) approach to calculate the following values involved in merger analysis. (Note: Only round intermediate calculations when entering them as a final answer.) Thus, the total value of GSC's equity is Suppose Widget Corp. plans to use more debt in the first few years of the acquisition of Global Satelite Corp. (GSC) Assuming that using more debt will not lead to an increase in bankruptcy costs for Widget Corp., the interest tax shields and the value of the tax, shield in the analysis, will Suppose Widget Corp. plans to use more debt in the first few years of the acquisition of Global Satellite Corp. (GSC) Assuming that using more deb will not lead to an increase in bankruptcy costs for Widget corp., the interest tax shields and the value of the tax shield in the analysis, will , leading to a value of operations of the acquired firm. The APV approach is considered useful for valuing acquisition taroets, because the mothod involves finding the values of the untevered firm and the interest tax shield separately and then summing those values. Why is it difficult to value certain types of acquisitions using the corporate valuation model? The acquiring firm immediately retires the target firm's old debt. Thus, the acquisition deal consists of only new debt in its capitat structure. The acquiring firm usually assurnes the debt of the target firm. Thus, old debt with difforent coupon rates uscally becomes a part of the acquisition deal