Firm A has a value of $200 million and Firm B has a value of $120 million.
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Firm A has a value of $200 million and Firm B has a value of $120 million. Merging the two would enable cost savings with $3 million in perpetuity. Firm A acquires Firm B for $130 million in cash. Assuming the cost of capital for the new firm is 10% p.a. How much do Firm A's shareholders gain from this merger?
Related Book For
International Financial Statement Analysis CFA Institute Investment Series
ISBN: 9780470287668
1st Edition
Authors: Thomas R. Robinson, Hennie Van Greuning CFA, Elaine Henry, Michael A. Broihahn, Sir David Tweedie
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