Firm B has current value of $500 and seeks to acquire Firm T with a current market value of $100. The financial manager of Firm B believes that the two firms combined would be valued at $650.

Calculate the gain to the merger.

Calculate the NPV of the merger if Firm B offers $110 for Firm T.

Discuss the distribution of gains if Firm T will only accept an offer of $150.

Answer rating: 100% (QA)

To calculate the gain from the merger we need to find the difference between the combined value of t... View the full answer