Question

Who, Inc., has offered $542 million cash for all of the common stock in Dunn IT Corporation. Based on recent market information, Dunn IT is worth $504 million as an independent operation. If the merger makes economic sense for Who, Inc., what is the minimum estimated value of the synergistic benefits from the merger

Answer 1

The synergistic benefits from the merger = $38 million

Step-by-step explanation:

Given:

Who Inc. offered amount = $542 million

Dunn IT current worth = $504 million

Computation of synergistic benefits from the merger :

The synergistic benefits from the merger = Who Inc. offered amount - Dunn IT current worth

The synergistic benefits from the merger = $542 million - $504 million

The synergistic benefits from the merger = $38 million