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Charlie Corporation is analyzing the possible acquisition of Delta Inc. Neither firm has debt. The forecasts...

Charlie Corporation is analyzing the possible acquisition of Delta Inc. Neither firm has debt. The forecasts of Charlie show that the purchase would increase its annual after-tax cash flow by $425,000 indefinitely. The current market value of Delta is $8.8 million. The current market value of Charlie is $22 million. The appropriate discount rate for the incremental cash flows is 8%. Charlie is trying to decide whether it should offer 35% of its stock or $12 million in cash to Delta.

Required

1.       What is the synergy from the merger?

2.       What is the value of Delta to Charlie?

3.       What is the cost to Charlie of each alternative?

4.       What is the NPV of Charlie of each alternative?

I WANT NEW ANSWER OLD ANSWER I SEARCH IT CHEGG IT WRONG CAN YOU SEND ME NEW ANSWER I SHOULD BE PLAGLISM DONT SEND ME OTHER PEOPLE WORK PLEASE

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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