medium · Investment Banking
A buyer uses its own cash balance of $200M to fund an acquisition. The cash was previously earning 2.0% in a money market account. The tax rate is 30%.
What is the annual 'cost' of this cash to be subtracted in the pro-forma Net Income calculation?
- $1.4M
- $200M
- $4.0M
- $2.8M
Sign up free to see the explanation and track your rank →
More Investment Banking practice
- What is the Multiple on Invested Capital (MOIC)?
- What is the control premium?
- Which valuation methodology would likely produce the 'floor' valuation for a mature indust
- Which of the following changes, held in isolation, would most likely achieve this?
- What is the Multiple on Invested Capital (MOIC)?
- If a company has an Unlevered Free Cash Flow (UFCF) of $500 million in Year 5, a WACC of 1
- What is the 3-year Compound Annual Growth Rate (CAGR)?
- If a company's Net Debt is negative, what is the relationship between its Equity Value and