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Three Guys Burgers, Inc., has offered $16 million for all of the common stock in...

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Finance

Three Guys Burgers, Inc., has offered $16 million for all of the common stock in Two Guys Fries, Corp. The current market capitalization of Two Guys as an independent company is $14.6 million. Assume the required return is 9.5 percent and the synergy from the acquisition is a perpetuity.

What is the minimum annual synergy that Three Guys feels it will gain from the acquisition?

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