VelSad is contemplating the acquisition of Po, Inc. The values of the two companies as separate entities are $32 million and $16 million, respectively. VelSad estimates that by combining the two companies, it will reduce marketing and administrative costs by $560,000 per year in perpetuity. VelSad can either pay $20 million cash for Po or offer Po a 44% holding in VelSad. The opportunity cost of capital is 10%. What is the cost of the stock offer?
+4
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “VelSad is contemplating the acquisition of Po, Inc. The values of the two companies as separate entities are $32 million and $16 million, ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Home » Business » VelSad is contemplating the acquisition of Po, Inc. The values of the two companies as separate entities are $32 million and $16 million, respectively.