List and describe the components used to calculate synergy value.

Practice Problems and Analysis

Read the assigned article, “Are You Paying Too Much for That Acquisition?” by Eccles, Lanes, and Wilson, from Harvard Business Review (1999).

  1. Using information from “Are You Paying Too Much for That Acquisition?” address the following with a minimum of 500 words.
  2. List and describe the components used to calculate synergy value.
  3. Critically evaluate which component is most underestimated. Explain your answer.
  4. Using the attached spreadsheet “Excel-Based M&A Valuation and Structuring Model,” open the worksheet labeled BP APP B2 and study the Net Sales Growth Rate for 2002-2005. Next, open the worksheet labeled BP APP B1 and study the 2006-2010 Net Sales Growth Forecasts. Lastly, reference “Are You Paying Too Much for That Acquisition?” to identify the basis or rationale for justifying the 2006-2010 forecasts.

APA format is required for essays only. Solid academic writing is always expected. For all assignment delivery option, documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

This assignment uses a grading rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.