question archive A company PT A (Tbk) as a target will be acquired by another company, namely PT B (Tbk) as the holding company

A company PT A (Tbk) as a target will be acquired by another company, namely PT B (Tbk) as the holding company

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A company PT A (Tbk) as a target will be acquired by another company, namely PT B (Tbk) as the holding company. The information of the two companies after the acquisition is as follows :

 

 

PT A (Tbk)

PT B (Tbk)

FCF (Rp miliar)

15

6

WACC (%)

9%

5%

Growth (%)

3%

5%

Share price (Rp)

20.000

10.000

Shares outstanding

(lembar)

 

8.000.000

 

1.000.000

 

a. You as a corporate finance consultant, try to calculate the synergies resulting from the acquisition, assuming that: (i) the sales value of the two companies is the same as the market value and (ii) both companies have stable growth in perpetuity.

b. Why is a large company with slow growth being the target of another company to acquire?

pur-new-sol

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