A target company is currently valued at 50 in the
A target company is currently valued at $50 in the market. A potential acquirer believes that it can add value in two ways: $15 of value can be added through better working capital management, and an additional $10 of value can be generated by making available a unique technology to expand the target’s new product offerings. In a competitive bidding contest, how much of this additional value will the acquirer have to pay out to the target’s shareholders to emerge as the winner?

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