Estimate the cost of capital for ruivo

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1). Estimate the cost of capital for Ruivo.

2). Using DCF method, estimate the stand-alone value of equity in Ruivo.

3). You believe that the combined ?rm will have some economies of scale, allowing it to cut Ruivo's operating costs as a percentage of sales by 2 percentage points in year 1 and by an additional 3 percentage points in year 2 and then stabilize at that level. All other value drivers in Ruivo will remain the same (assume that Ampe Int.'s fundamentals are not affected by the merger). Estimate the value of deal synergy.

Reference no: EM133112751

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