Assume that at year-end 2015 the company's equity is worth 15 times earnings after tax and its debt is worth book value.Macklemore's WACC is 8.0 percent.BSL's WACC is 11.5 percent,and the average of the two companies' WACCs,weighted by sales,is 8.2 percent.What is the maximum acquisition price (in $ millions) Macklemore should pay to acquire BSL's equity at the end of 2010?
A) $3,484.68
B) $4,723.26
C) $4,938.06
D) $5,554.68
E) $6,343.26
F) None of the above.
Correct Answer:
Verified
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