CIMA Exam CIMAPRA19-F03-1 Topic 2 Question 35 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 35
Topic #: 2

On1 January:

* Company X has a value of $50 million

* Company Y has a value of $20 million

* Both companies arewhollyequity financed

Company X plans to take over Company Y by means of a share exchange. Following the acquisition the post-tax cashflow of Company Xfor the foreseeable futureis estimated to be $8 millioneach year. The post-acquisition cost of equity is expected to be 10%.

What is the best estimate of thevalue of the synergy that would arise from the acquisition?

A$10 million

B$30 million

C$60 million

D$100 million

Show Suggested Answer

Suggested Answer: A

by Merlyn at May 06, 2022, 03:41 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!