Assignment:
Read the attached example on how to do a valuation of a company that is the target for an acquisition.
1. Based on the current stock price stock of Arcturus Gear Works what price do you think that Aldebron should pay for Arcturus? Why?
2. What factors should Aldebron consider when making the offer to buy Arcturus?
3. If Arcturus had a different capital structure of 20% debt and a pre-tax cost of debt of 8% , how much should Aldebron pay for Arcturus Why?
Attachment:- Merger Analysis with terminal Value.rar