How much synergy does the merger generate if


Firms A and B are competitors with very similar assets and business risks. Both are all-equity firms with after tax CFs of $100 per year forever, and both have overall cost of capital of 10%. The after-tax CF of the merged firm would be $220 per year. How much synergy does the merger generate, if any?

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Financial Management: How much synergy does the merger generate if
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