4. Valuing a Foreign Target Blore, Inc., a U.S.-based MNC, has screened several targets. Based on economic and political considerations, only one eligible target remains in Malaysia. Blore would like you to value this target and has provided you with the following information: Blore expects to keep the target for three years, at which time it expects to sell the firm for 500 million Malaysian ringgit (MYR) after any taxes. Blore expects a strong Malaysian economy. The estimates for revenue for the next year are MYR300 million. Revenues are expected to increase by 10 percent in each of the following two years. Cost of goods sold is expected to be 50 percent of revenue. Selling and administrative expenses are expected to be MYR60 million in each of the next three years. The Malaysian tax rate on the targets earnings is expected to be 30 percent. Depreciation expenses are expected to be MYR30 million per year for each of the next three years. The target will need MYR10 million in cash each year to support existing operations. The targets stock price is currently MYR30 per share. The target has 10 million shares outstanding. Any remaining cash flows will be remitted by the target to Blore, Inc. Blore uses the prevailing exchange rate of the Malaysian ringgit as the expected exchange rate for the next three years. This exchange rate is currently $.25. Blores required rate of return on similar projects is 20 percent. a. Prepare a worksheet to estimate the value of the Malaysian target based on the information provided. b. Will Blore, Inc., be able to acquire the Malaysian target for a price lower than its valuation of the target? (Assume that Blore, Inc. pays a 20 percent premium on markets share price)