Question: Please answer correctly, will leave a thumbs up if correct! Firm A is acquiring Firm B. Firm A's share price is $15 and Firm B's

Please answer correctly, will leave a thumbs up if correct!
Firm A is acquiring Firm B. Firm A's share price is $15

Firm A is acquiring Firm B. Firm A's share price is $15 and Firm B's share price is $12. Firm A has 2 million and Firm B has 4 million shares outstanding. Firm A expects a discounted synergistic value of $8.5 million from the merger. If Firm A pays $50 million cash to Firm B's shareholders, what is the NPV of the acquisition? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!