Find out the npv of the merger to harrods

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Question - Harrods Corporation has a market value of Tk. 330 crore and 10 crore shares outstanding. Agora Department Store has a market value of Tk. 110 crore and 6 crore shares outstanding. Harrods is contemplating acquiring Agora. Harrods's CFO concludes that the combined firm with synergy will be worth Tk. 475 crore, and Agora can be acquired at a premium of Tk. 13 crore. Harrods wants to acquire Agora giving the premium and to make the payment for the acquisition by issuing new shares of its stock.

a. Find out the NPV of the merger to Harrods.

b. Find out how many shares of its stock Harrods should issue and give to the shareholders of Agora to acquire Agora.

c.  Also find out what will the stock price of Harrods be after the acquisition?

Reference no: EM132999528

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