Question: M&A: You are evaluating a potential takeover target. A junior analyst on your team provided the target FCFF forecast below. In addition, you have information
M&A: You are evaluating a potential takeover target. A junior analyst on your team provided the target FCFF forecast below. In addition, you have information about the target's debt, interest expenses, tax rate, and unlevered cost of equity.
Q Estimate the Enterprise Value of the target firm based on its free cash flows and interest tax shield ie use the CAPV method
Q Estimate the target's pershare value
Q As an analyst for the acquirer, what's the maximum you would recommend paying for the target on a pershare basis?
SHOW WORK HERE, HIGHLIGHT FINAL ANSWER IN YELLOW
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