Homework SoursePearl Inc has offered 458 million cash for all of the common
Pearl, Inc., has offered $458 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $426 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
| Pearl, Inc., has offered $458 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $426 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) |
Solution
Minimum economic value = purchase price - market value
Minimum economic value = 458,000,000 - 426,000,000
Minimum economic value = $32,000,000
