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Suppose you are asked to estimate the impact of a proposed merger of two companies on their potential combined value. The companies are in different...

Suppose you are asked to estimate the impact of a proposed merger of two companies on their potential combined value. The companies are in different (but not completely different) product lines. Suppose you select the CAPM framework to generate your estimate of the merged firm value; how accurate would be your estimate of the risk and value of the merged firm? What potential effects would not be reflected in your estimate, and what procedures would one use to remedy any biases in the estimate? Explain.

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