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Dunbar Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern ...

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Dunbar Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern ...

Dunbar Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern Hardware. Dunbar'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%. Eastern has 4 million shares outstanding and no debt. Eastern's current price is $16.25. What is the maximum price per share that Dunbar should offer?

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$16.25

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$16.97

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$17.42

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$18.13

Textbook

Financial Management: Theory and Practice

Edition: 4^th

Authors: Brigham, Ehrhardt, Gessaroli, Nason

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Just got PERFECT on my quiz

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This calls for a celebration Person Raising Both Hands in Celebration

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