What is the synergy worth? What is the maximum price Novell can pay for Word Perfect?

What is the synergy worth? what is the maximum price novell can pay

The synergy of a merger between Novell and WordPerfect is essentially the expected difference in value that results from combining two companies. It can be calculated using a number of different methods and generally involves assessing the financial benefits, such as cost savings, increased revenue and market share, as well as potential intangible values like brand recognition or customer loyalty.

In order to determine the maximum price Novell could pay for Word Perfect, it would first involve estimating the total value of both companies combined. This means analyzing their balance sheets, income statements and other financial records to get an idea of how much money each company generates annually. Additionally, both companies must consider any potential risks associated with merging and account for these in their calculations.

After establishing an estimated value for each company combined, Novell must then factor in any additional costs associated with the integration process such as legal fees or advisory services. From there they can develop an upper limit on what they are willing to pay based on their own internal assessment of the likelihood that a successful combination will lead to greater profitability than either firm alone could achieve without taking too much risk along the way.

Finally, Novell must also take into consideration any external forces that may have an effect on valuation including industry trends or competitor actions in order to ensure that its offer is competitive enough within its particular market context. Ultimately this will help them come up with a maximum amount they’re willing to pay which should be lower than what was initially established by their internal evaluation but higher than what might be offered by competing bidders if applicable.