Suppose Firm A has a value of $350m, and Firm B has a value of 80m,...
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Suppose Firm A has a value of $350m, and Firm B has a value of 80m, and the estimated value for the merged company AB would be around $450m. Suppose the shareholders in the target firm are offered 20% of the equity in the combined company. a) What is the synergy/gain of this deal? b) What is the value of the deal to the target Firm B's shareholders? c) What is the value of the deal to the acquirer Firm A's shareholders? Suppose Firm A has a value of $350m, and Firm B has a value of 80m, and the estimated value for the merged company AB would be around $450m. Suppose the shareholders in the target firm are offered 20% of the equity in the combined company. a) What is the synergy/gain of this deal? b) What is the value of the deal to the target Firm B's shareholders? c) What is the value of the deal to the acquirer Firm A's shareholders?
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a The synergygain of the deal can be calculated as the difference between the value of the me... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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