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Chapter 18, Problem 18.1STP

a)

Summary Introduction

To determine: whether the proposed cash acquisition is desirable.

Introduction:

Acquisition refers to acquiring of one company to build the strength and weakness of another firm.

b)

Summary Introduction

To discuss: Whether the recommendation in above part will have any changes, if the cost of capital remains unchanged.

Introduction:

Acquisition refers to acquiring of one company to build the strength and weakness of another firm.

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