Question: Mega Pharma, Inc. (MPI) is considering merging with a smaller, independent company, SuperDrug, Ltd. (SDL). Using the appropriate discount rate of 12%, the analysts at

Mega Pharma, Inc. (MPI) is considering merging with a smaller, independent company, SuperDrug, Ltd. (SDL). Using the appropriate discount rate of 12%, the analysts at MPI have determined that the present value of the possible merger synergy would be $59.295 million. SDLs current market price is $50.25, and the firm has 5.5 million shares outstanding. What is the maximum price per share that MPI should offer to purchase SDL?

A $6.08

B $55.94

C $61.03

D $57.78

$55.25

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