Dunbar Hardware, a National Hardware Chain, Is Considering Purchasing a Smaller

question 31

Multiple Choice

Dunbar Hardware, a national hardware chain, is considering purchasing a smaller chain, Eastern Hardware. Dunbar's analysts project that the merger will result in incremental free flows and interest tax savings with a combined present value of $72.52 million, and they have determined that the appropriate discount rate for valuing Eastern is 16%. Eastern has 4 million shares outstanding and no debt. Eastern's current price is $16.25. What is the maximum price per share that Dunbar should offer?

• A) $16.25
• B) $16.97
• C) $17.42
• D) $18.13
• E) $19.00

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Definitions:

Multipolar Neuron

A type of neuron characterized by having one axon and multiple dendrites, allowing for the integration of a large amount of information from various sources.

Bipolar Neuron

A type of neuron that has two extensions (one dendrite and one axon), commonly found in the sensory systems like retina and olfactory system.

Neuroglial Cell

Non-neuronal cells in the nervous system that provide support and protection for neurons, playing a crucial role in maintaining homeostasis and forming myelin.

Node of Ranvier

A narrow gap in the myelin sheath between segments of a neuron's axon, which facilitates rapid conduction of nerve impulses.