Assumptions would result in the lowest present value

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Reference no: EM132020879

1. Suppose the required rate is 8% (APR), which of the following assumptions would result in the lowest present value?

a. monthly compounding

b. annual compounding

c. daily compounding

d. quarterly compounding

2. Pratt and Dansville are all-equity firms. Pratt has 4,000 shares outstanding at a market price of $60 a share. Dansville has 3,500 shares outstanding at a price of $36 a share. Pratt is acquiring Dansville for $132,000 in cash. The synergy of the acquisition is $10,000. What is the value of Dansville to Pratt?

$143,000

$136,000

$151,000

$147,000

$125,000

Reference no: EM132020879

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