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Respected sir, synergy is value of combined company less value of individual company before acquisition in this case vogel company didn’t had any debt but tori had before acquisition so why that 40 million is not considered while deducting value of tori co from total value after acquisition. Is it because debt is already taken over by Dept B?
Partly it is that.
But mainly it is due to the fact that discounting the free cash flows at the WACC gives the total value of the business (equity plus debt).
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