Microsoft is considering acquiring a startup firm for $360 million which is a 20% premium over the equity value of the target, pre-acquisition. The synergistic benefits are expected to equal zero in the first three years and then is expected to equal $20 million in year 4. The synergistic benefit in year 4 ($20 M) is expected to grow by 3% per year in perpetuity and the appropriate required return is 13% per year. Provide an equation

Answer rating: 100% (QA)

I will use the discounted cash flow DCF methodology to calculate the net ... View the full answer