Ex. 3Company A is considering acquiring company B.Calculate the combined PV of Companies A and B, the goodwill and the net gain for the shareholders of company A and shareholders of Company B, considering the following financial information:Present value of Company APresent value of Company BCost saving from merger of A and BPrice A pay for B(EUR)30752280mnmnmnmnThe present value of company B increase by EUR 7 mn on the back of rumors about the potential merger.Calculate the adjusted goodwill and adjusted gain for the shareholders of company A and shareholders of Company B after the rumors.

As per the given information: Present value of Company A - 30 mn Present value of Company B - 75 mn…

Answered: Company A is considering acquiring…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter12: Valuation: Cash-flow Based Approaches

Section: Chapter Questions

Problem 2CIC

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