Answer Happy

Suppose you are hired by a company to advise it on a potentialtakeover of another company in a somewhat different (but notcompletely different) product line. Explain a good procedure forestimating the value of the potential takeover. In your discussion,describe:
(1) appropriate measures of the riskiness of this venture;
(2) how these risks get reflected in the discount rate; andalso
(3) comment on the measure beta and its advantages anddisadvantages as a risk measure.