ABC Company just paid $6 million in cash for all 140,000 outstanding shares of XYZ Corp.XYZ's...
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ABC Company just paid $6 million in cash for all 140,000 outstanding shares of XYZ Corp.XYZ's stock was recently trading for $30 per share. The merger is expected to generate an incremental cash flow of $350,000 per year for the indefinite future. Using a discount rate of 8%, what is ABC Company's gain or loss from this investment? ABC Company just paid $6 million in cash for all 140,000 outstanding shares of XYZ Corp.XYZ's stock was recently trading for $30 per share. The merger is expected to generate an incremental cash flow of $350,000 per year for the indefinite future. Using a discount rate of 8%, what is ABC Company's gain or loss from this investment?
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To determine ABC Companys gain or loss from the investment we need to calculate the net present valu... View the full answer
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