Why WACC cannot be used as a discount for calculating the value of a merger and acquisition
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 87% (8 reviews)
WACC is used as the discounting factor for a firm whose value is to be determined ...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
4.00+
2+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
Question Posted:
Students also viewed these Corporate Finance questions
-
Why can't the APR be used as a discount rate?
-
Short-Term Financing Analysis Malone Feed and Supply Company buys on terms of 1/10, net 30, but it has not been taking discounts and has actually been paying in 60 rather than 30 days. Assume that...
-
Answer the below questions. (a) What factor can be used as a proxy for cash-out refinancing incentives? (b) Why are prepayments attributable to cash-out refinancing likely to be insensitive to...
-
Plainbank has $10 million in cash and equivalents, $30 million in loans, and $15 in core deposits. a. Calculate the financing gap. b. What is the financing requirement? c. How can the financing gap...
-
One of the common rock-forming minerals is plagioclase feldspar which contains variable amounts of Na and Ca in addition to Al, Si, and 0. Pure Na-plagioclase has the formula NaA1Si3O3. Because the...
-
Della Simpson, Inc., sells two popular brands of cookies: Dellas Delight and Bonnys Bourbon. Dellas Delight goes through the Mixing and Baking departments, and Bonnys Bourbon, a filled cookie, goes...
-
Carburettor is used for (a) S.I. engine (b) C.I. engine (c) Gas engine (d) none of the above
-
On January 1, 2011, John Doe Enterprises (JDE) acquired a 55% interest in bubba Manufacturing Inc. (BMI). JDE paid for the transaction with $3 million cash and 500,000 shares of JDE common stock (par...
-
8.5 moles of an ideal gas (monatomic) expand adiabatically, and performing 8300 J of work in the process. (a) What is the change in internal energy of the gas?. (b) What is the change in temperature...
-
The 0.025 0 m KH2PO4/0.025 0 m Na2HPO4 buffer (6) in Table 14-3 has a pH of 6.865 at 25C. (a) Show that the ionic strength of the buffer is = 0.100 m. (b) From the pH and K2 for phosphoric acid,...
-
Suppose the short-run production function is q=20*L. If the wage rate is $10 per unit of labor, then AVC equals___. Suppose the short-run production function is q=40*L. If the wage rate is $10 per...
-
Cost data for Mix-A-Lot Manufacturing Company for the month ended March 31, 2016, are as follows: Inventories _______________March 1____________________March 31...
-
You are general counsel at AirSolutions, a freight forwarder in the air cargo industry. A senior account manager visits you in your office and alleges that her boss has been secretly meeting with...
-
Find the integral J (x sec (2x) - 2x sin x) dx = x tan(2x) + x cos x
-
A car travels 55 m [E 50 S] before turning and traveling 30 m [E] then traveling 40 m [W 30 S]. The trip takes 70 seconds. a. What is the distance and displacement? b. What is the velocity (net) and...
-
XYZ Limited is a listed company on the Jamaica Stock Exchange. Its market capitalization as at December 3 1 , 2 0 1 5 was $ 5 5 0 m and the outstanding shares at the same date was 4 0 , 0 0 0 , 0 0 0...
-
For all payroll calculations, use the following tax rates and round amounts to the nearest cent: Employee: Employer: OASDI: 6.2% on first $132,900 earned; Medicare: 1.45% up to $200,000, 2.35% on...
-
The piston with a mass of 45 kg in the figure below is supported by a suspension with a spring coefficient and a damping coefficient. The harmonic pressure loading in its form affects the piston,...
-
Plot complex number in the complex plane and write it in polar form. Express the argument in degrees. 2 + 3i
-
The rate at which the temperature of an object changes is proportional to the difference between its own temperature and the temperature of the surrounding medium. Express this rate as a function of...
-
Comparing Investment Criteria Consider the following two mutually exclusive projects: Whichever project you choose, if any, you require a 15 percent return on your investment. a. If you apply the...
-
NPV and Discount Rates An investment has an installed cost of $724,860. The cash flows over the four-year life of the investment are projected to be $324,186, $375,085, $354,302, and $205,680. If the...
-
MIRR Slow Ride Corp is evaluating a project with the following cash flows: The Company uses a 10 percent interest rate on all of its projects. Calculate the MIRR of the project using all three...
-
Prove that Russian multiplication does what it needs to do, i.e. the result is the product of the two integers. Do not use the proof of the book. It is mainly an exercise in understanding the binary...
-
What is the fundament difference between growing a unicorn versus a camel? What are the financial recommendations for start-ups and the reasons given for those choices? Do you agree with these...
-
16. Nickel Inc. bought $500,000 of 3-year, 9% bonds as an investment on December 31, 2015 for $545,000. Nickel uses straight-line amortization. On May 1, 2016, $100,000 of the bonds were redeemed at...
Study smarter with the SolutionInn App