The value of synergy is estimated by the equation:
A) VA+ VB- ΔRevenue.
B) VAB- VA- VB.
C) VAB- VB- Taxes.
D) VA- VB- ΔCosts.

Question

Quizplus · Accepted Answer

The equation that calculates the value of synergy is VAB- VA- VB, which takes into account the combined value of both companies (VAB) and subtracts the individual values of each company (VA and VB). This represents the additional value created by the merger or acquisition. The other choices do not accurately reflect the calculation of synergy.

The Value of Synergy Is Estimated by the Equation