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Question
An all-equity firm worth $50 billion acquires for $4 billion cash a firm whose postacquisition value will be $6 billion. The acquiring firm had the cash and did not need to borrow. The current market value of the target is $3 billion. What is the estimated return to the shareholders of the acquiring firm?
a) 2 percent.
b) 4 percent.
c) 6 percent.
d) 8 percent.
Answer
This answer is hidden. It contains 46 characters.
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