What will be the postmerger value of the firm

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1. Prudoe Fuels factors its accounts receivable immediately at a discount of 1.65 percent. The average collection period is 43 days. Assume all accounts are collected in full. What is the effective annual interest rate on this arrangement? Assume a 365-day year.

16.67%

16.09%

18.51%

15.17 %

14.97%

2. Global Network has a market value of $713,000. AG Communications has 46,700 shares of stock outstanding at a price per share of $56. AG is acquiring Global in an exchange for 13,500 shares of AG stock. The merger is expected to create $28,000 of synergy. What will be the postmerger value of the firm?

$3,220,000

$3,356,200

$3,298,000

$3,482,800

$3,218,100

Reference no: EM132068811

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