Notre Dame Alliance Inc.(NDA) is worth $3 billion and wants to take over Vancouver Company Inc.(VC) ,which is worth $1.5 billion.NDA expects the deal to result in $0.5 billion in synergies.Supposing a bidding war arises and NDA ends up paying $2 billion in a stock swap for VC,and then finds there are no synergies,how much have NDA shareholders gained or lost on the deal?
A) NDA shareholders lose $0.33 billion on this deal.
B) NDA shareholders lose $0.3 billion on this deal.
C) NDA shareholders lose $0.5 billion on this deal.
D) None of the above.
Correct Answer:
Verified
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