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Vivendi Company has a market value of $273,600 while UBC Corporation has a market value of...

Vivendi Company has a market value of $273,600 while UBC Corporation has a market value of $119,400. UBC is merging with Vivendi and expects the combined firm to have a market value of $446,000. If the current Vivendi shareholders obtain $302,000 of equity in the new firm, how much synergy was allocated to the UBC shareholders?

$0

$12,400

$24,600

$30,200

$17,800
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Answer #1

Solution :

The value of synergy allocated to the UBC shareholders = $ 24,600

Thus the solution is Option 3 = $ 24,600

Please find the attached screenshot of the excel sheet containing the detailed calculation for the above solution.

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