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Firm A has a value of $100 million and Firm B has a value of $70...

Firm A has a value of $100 million and Firm B has a value of $70 million. Merging the two would enable cost savings with a present value of $20 million. Firm A purchases Firm B for $75 million. What is the cost of this merger?

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Answer #1

Cost of this merger = $75 million - $70 million = $5 million

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