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Barrison is investigating the possible acquisition of Soulmaster. The two firms have the following basic...

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Finance

Barrison is investigating the possible acquisition of Soulmaster. The two firms have the following basic data:

Barrison Soulmaster

Number of shares 3,000,000 1,200,000

Current stock price $75.00 $25.00

The combined firm will result in a synergy gains of $15m.

a. What is the value of of the combined firm?

b. What is the NPV of acquisition if Barrison pays $30 in cash for each share of Soulmaster?

c. What is the NPV of the acquisition if Barrison offers one share of Barrison for every two shares of Soulmaster?

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