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Company A is considering the acquisition of Company B, a private company with a reported net
income of $10 million in 2022. Company B is a biotech company. There are two publicly traded
firms of similar size to Company B, that company A considers "pure plays". These are:
Company X (end of 2022) Market value of equity: $500 million Net Income: $8 million
Company Y (end of 2022) Market value of equity: $600 million Net Income: $12 million

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