Alpha Inc. is consering acquisition of Beta Corp. Both firms are all equity firms. Alpha Inc. projected
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Question:
Alpha Inc. is consering acquisition of Beta Corp. Both firms are all equity firms.
Alpha Inc. projected an increase in after-tax cash flows by 330107 indefinitely.
Beta Corp. is currently valued in the market at 8148413 USD
Alpha Inc. is valued at 21321116 USD
Alpha Inc. has established that appropriate discount rate for incremental cash flows is 9%
Alpha Inc. is deciding to either pay 30% of its stock or 13463604 in cash.
Find
a) Present Value of Incremental Cashflow
b) Total Value of Beta Corp. to Alpha Inc.?
c) Cost of Stock Payment
Cost of Cash Payment
d) NPV of merger with Stock Payment
NPV of merger with Cash Payment
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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