User Account

All Pages

Npv of the synergies associated with acquisition

Assignment Help Finance Basics
Reference no: EM132753591

A CFO is considering an acquisition of a target that is currently worth 3 billion dollars. The acquisition will produce annual after-tax cost savings of 70 million dollars. This annual cost savings is expected to begin in two years and to grow at the rate of inflation (assume it is 1%). In addition, the CFO expects that the acquisition will add an after-tax integration cost of 250 million dollars. Assume the integration cost will occur one year from now. The current discount rate of the acquirer is 10%.

The NPV of the synergies associated with this acquisition is?

Reference no: EM132753591

Questions Cloud

Describe a microeconomic variable for your industry : Develop a paper in which you select an industry that interests you, describe that industry, and explain how government might impact the industry
What is the dividend yield of the stock : If a stock you buy is $50 per share and pays $2 per year in total dividends; what is the dividend yield of the stock?
What are a bond key features : A major new client, AA Berhad has requested Money Management to present in an investment seminar. You will need to prepare the following questions for the semin
Conduct additional research to provide an analysis : Conduct additional research to provide an analysis of those 3 aspects. What information did you find that the video left out? How did the video enhance
Npv of the synergies associated with acquisition : A CFO is considering an acquisition of a target that is currently worth 3 billion dollars. The acquisition will produce annual after-tax cost savings
Find share price of bravos after levered recapitalization : Bravos currently has a share price of $35 and 20 million shares outstanding. In addition, the firm currently has $120 million in debt and no excess cash.
Prepare the adjusting entry for uncollectible accounts : At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Uncollectible Accounts has a credit balance of $5,500.
What is the payback period : The machinery will be depreciated to zero by year 6 using the straight-line method. The company's tax rate is 30 percent, and its cost of capital is 16 percent.
Explain the artistic movement associated with the work : Explain the artistic movement associated with the work of art and How does understanding the context of a work help in interpreting it

Reviews

Write a Review

Finance Basics Questions & Answers

  What is belyks net income what is its operating cash

during the year belyk paving co. had sales of 2700000. cost of goods sold administrative and selling expenses and

  Which measures use to provide an overview of nominal

There are three measures of central tendency: the mean, the median, and the mode. Measures of dispersion include the range, the standard deviation.

  Financial calculator to check your answers

Find the following values, using the equations, and then work the problems using a financial calculator to check your answers.

  What is the required rate of return for spear

You have the following information for the company "Spear". The "beta" coefficient for "Sear" is 1.21 based on the past information.

  Shares of stock in das

Farrah owns 5,000 shares of stock in DAS, Inc. with a market value of $15,000. DAS declares a 20% stock dividend. After the dividend is paid, Farrah owns.

  Calculate the amount naomi

-Calculate the amount Naomi will need to deposit each year into the CD at 2?% for 30 years to accumulate? $1 million.

  Calculate the expected price in 4 years

Calculate the expected price in 4 years. You expect the risk free rate to decrease to 3% and the market risk premium to increase to 10% in 4 years.

  Explain why you would change your nominal required rate

Explain why you would change your nominal required rate of return if you expected the rate of inflation to go from 0 (no inflation) to 4 percent. Give example of what would happen if you did not change your required rate of return under these cond..

  What impact does role conflict among police officers have

Often, there can be conflict between competing or conflicting roles of police officers. What is role conflict? What impact does role conflict among police officers have on police community relations?

  What is elroys filing status

What is Elroy's filing status? Assume the original facts except that Elroy has taken over the care of his grandmother, Renae, instead of his mother. What is Elroy's filing status?

  Dscuss american eagles ability to finance its investment

the following data were taken from the 2009 and 2008 financial statements of american eagle outfitters. all dollars

  Debt and defeasance of the present issue

You have decided to advance refund $10,000,000 of outstanding debt that is callable in 5-years. The interest rate on these bonds is 8%. You can issue new bonds at 6%.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd