Firm A is acquiring Firm B. Firm A's share price is $20 and Firm B's share price is $15. Firm A has 2 millio shares outstanding. Firm A expects a discounted synergistic value of $8.5 million from the merger. If Fir to Firm B's shareholders, what is the NPV of the acquisition? (Do not round intermediate calculations. I decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,00 1000.50.)
Firm A is acquiring Firm B. Firm A's share price is $20 and Firm B's share price is $15. Firm A has 2 millio shares outstanding. Firm A expects a discounted synergistic value of $8.5 million from the merger. If Fir to Firm B's shareholders, what is the NPV of the acquisition? (Do not round intermediate calculations. I decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,00 1000.50.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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33) can you please help with this question?
Transcribed Image Text:Firm A is acquiring Firm B. Firm A's share price is $20 and Firm B's share price is $15. 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 $65 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.)
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