(Answered) Firm a has an estimated beta of 16 and is considering

Finance

Firm A has an estimated beta of 1.6 and is considering acquiring another firm that has a beta of 1.2 and both companies are exactly the same size.

What is the expected new beta for the combined firm?
The risk free rate of return is estimated at 7% and the market return is estimated at 12%. What is the estimated required return of investment before and after the merger?
Firm A is expected to pay $1 dividend next year (D1=$1). The dicvidend is expected to grow at 6% per year if the merger is completed. Future dividends are expected to grow at 7% as a rusult of the merger.
What is the share value of Firm A before the merger?
What is the new share value after the merger is completed?
Is the merger recommended, why or why not?

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