Based on capital budgeting criteria this investment

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Based on firm valuation, you believe the acquirer has to pay at least 15% premium. Please design a strategy to convince your client to acquire Apple Inc. This client always uses debt to lever its investment return. The required rate of return for this client is at least 18%. It can borrow a five-year loan at 4% interest rate. The lender requires a series of principal payments: 5% in year one and year two, 7% in year three, 10% in year four, and the rest principal pay-off in year five. You need to work on the spreadsheet and show your client that based on capital budgeting criteria this investment can meet the client’s requirement if the client applies the strategy you recommend.

Reference no: EM132060979

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