Shark Attack plc has just launched a takeover bid for Soft Target plc. Shark Attack believes that it has identified 20,000,000 of annual efficiency savings at Soft Target. Shark Attacks investors demand a return of 8% for the risk associated with an investment in Soft Target, and the corporate tax rate is 40%. What is the maximum premium that Shark Attack is prepared to pay over Soft Targets pre-bid value?

Answer rating: 100% (QA)

To determine the maximum premium Shark Attack plc is prepared to pay over Soft Target plcs prebid va... View the full answer