Question: PLZ PLZ HELP a) Dialog Corp (DC) provides technical services to the upstream, midstream, and downstream sectors in the oil, gas, and petrochemical industry. The
PLZ PLZ HELP


a) Dialog Corp (DC) provides technical services to the upstream, midstream, and downstream sectors in the oil, gas, and petrochemical industry. The current market price of DC stock is $6.50 per share and it has a total of 152 million shares outstanding. The company is looking to expand the current scope of operations due to the recent economic recovery from Covid-19 pandemic. One possibility suggested by the Board of Directors is to carry out a horizontal acquisition. The Chief Financial Officer (CFO) of DC has found a potential company, Serba Dynamic (SD) and estimated the potential synergy from acquisition where the information is displayed in the tables below. Private information from DC management will become public within one year after any potential merger is completed. Company Current Share Price Shares Outstanding (millions) Serba Dynamic (SD) $5 35 Potential Synergy from merger according to: Consensus Analyst Private Information of DC View Management (public info) Company Serba Dynamic (SD) $70 millions $30 millions If DC offers 100 million shares of its stock for SD, If DC offers 100 million shares of its stock for SD, i) Calculate the post-merger price per share of the merged firm before the private information is revealed. (3 marks) ii) Calculate the post-merger price per share of the merged firm after the private information is revealed. (3 marks) iii) Based on private information, determine whether DC should make the stock offer to SD using the NPV criterion
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