Question: Please answer all the questions Multiple choice options: Does not continue Continues Value options 1. 16.08% 13.10% 15.37% 13.52% 2. 135.51 Million 189.29 Million 318.00
3. Merger valuation and discounted cash flows As Aa When a merger takes place between two companies to form a single firm, the target company to operate as a separate identity. Consider the following scenario: Sto Hard Hoidings Co. (SHH) is considering an acquisition of Mall Toys Co. (MTC), and estimates that acquiring MTC will result in incremental after-tax net cash flows in years 1-3 of $10.0 million, $15.0 million, and $18.0 million, respectively After the first three years, the incremental cash flows contributed by the MTC acquisition are expected to grow at constant rate of 6% per year. SHH's current beta is 1.20, but its post-merger beta is expected to be i.56. The risk-free rate is 5%, and the market risk premium is 7.10%. Based on this information, complete the foilowing table by seliecting the approonate valuess Value Post-merger cost of equity Projected value of the cash flows at the end of three years The value of Mall Toys Co. (MTC)'s contribution to Sto Hard Holdings Co. (SHH) Mall Toys Co. (MTC) has 3 million shares of common stock outstanding. What is the largest tender offer Sto Hard Holdings Co. (SHH) should make on each of Mall Toys Co. (MTC)'s shares? O $50.76 O $60.91 O $40.61
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