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Firm a Wants to Merge with fiRm B and as an Acquiring

Question 81

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Firm A wants to merge with firm B and as an acquiring firm is willing to pay a premium.Firm A's equity is currently worth EUR100 million, firm B's equity is worth EUR20 million.Firm B has 1,000,000 shares outstanding.Synergy gains are estimated to be around 10%.What is the maximum should Firm A offer to pay firm B's shares?

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The combined firm will be worth 10% more ...

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