Question 6 3 points Save Answer ABC Corp. has reached a deal to acquire DEF Inc. at $450 per share. This represents 40% premium over the closing price of DEF. While some analysts commented that this valuation of 100 times earnings of DEF was quite high, ABC contended that considering the large growth rate of DEF, the PEG ratio for this deal is a reasonable 2. The closing price of DEF was per share. The earnings per share of DEF were The growth rate of DEF was %. Question 7 1 points Save Answer An investor believes that she can improve the operating income of a target firm by 20 percent by introducing modern management and marketing techniques. A review of the target's financial statements reveals that it's operating profit in the current year is 18.8 million. Recent transactions, resulting in a controlling interest in similar businesses in public equity market, were valued at six times operating income. The investor also believes that the liquidity discount for businesses similar to the target firm is 10 percent. What is the highest price in million she should be willing to pay for a 55 percent stake in the target firm? Question 6 3 points Save Answer ABC Corp. has reached a deal to acquire DEF Inc. at $450 per share. This represents 40% premium over the closing price of DEF. While some analysts commented that this valuation of 100 times earnings of DEF was quite high, ABC contended that considering the large growth rate of DEF, the PEG ratio for this deal is a reasonable 2. The closing price of DEF was per share. The earnings per share of DEF were The growth rate of DEF was %. Question 7 1 points Save Answer An investor believes that she can improve the operating income of a target firm by 20 percent by introducing modern management and marketing techniques. A review of the target's financial statements reveals that it's operating profit in the current year is 18.8 million. Recent transactions, resulting in a controlling interest in similar businesses in public equity market, were valued at six times operating income. The investor also believes that the liquidity discount for businesses similar to the target firm is 10 percent. What is the highest price in million she should be willing to pay for a 55 percent stake in the target firm