When the synergy benefits are being calculated, in the bpp solution, should the value of debt of fodder ($40,104,000 * 10%) not be subtracted from the value of the benefits as the question sates that pursuit would pay off ‘any outstanding debt that fodder had’?
No – they are correct. The value of the business is the business ‘as it stands’ and would therefore automatically be assuming that the acquirer was taking over the existing debt.