Explore BrainMass

Explore BrainMass

    Having trouble setting up this problem

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    American Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern Hardware. American's analysts project that the merger will result in incremental free flows and interest tax savings with a combined present value of $72.52 million, and they have determined that the appropriate discount rate for valuing Eastern is 16 percent. Eastern has 4 million shres outstanding. Eastern's current price is $16.25. What is the maximum price per share that American should offer?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:07 pm ad1c9bdddf
    https://brainmass.com/business/finance/having-trouble-setting-up-this-problem-30119
    $2.49

    ADVERTISEMENT