00:01
Okay, so we're given two firms here, a firm a and firm b.
00:11
Okay, the value of the first firm, which is firm a, is actually given as $200 million.
00:19
And the value of the second firm, firm b is given as $120 million.
00:25
Now, we understand that the cost saving from the combination of these firms, is going to be $30 million.
00:37
All right.
00:40
Then a purchases b.
00:42
So if firm a purchases, let's indicate there to be specific, firm a, purchases b, and we are given, this is done at the value of $130 million.
01:06
So the question is, how much are the shareholders of firm a going to gain from this transaction? well, the first thing that we need to look at is how much a shareholders would gain.
01:28
Okay, so to have a good look at this, we first of all need to find out how much they gain on cost saving.
01:36
So gain on cost saving equals.
01:44
$30 million...