1. Identify a company that has recently announced an acquisition. Study the terms of the deal and identify to the extent possible the market value of the target, its intrinsic value, and the acquisition price.

2. What was the acquisition premium?

3. Using the synergy trap formula, determine the performance improvements required to justify this acquisition premium.

4. Calculate the required performance improvements with different assumptions as to how long it will take to implement them in, say, one, three, and five years.

5. What is the difference in these required performance improvements if the acquisition premium is 50 percent lower than what was paid? What if it is 50 percent higher?