Module V· Premium / ROIC / Value Creation AnalysisAdvanced
Question

How do you calculate maximum affordable premium (MAP)?

Answer

MAP is the highest premium the acquirer can pay while still meeting a constraint such as EPS neutrality, leverage ceiling, ROIC above WACC, or NPV above zero. Mechanically, flex offer price until the binding metric hits the threshold. In pitches, show MAP under base, downside, and upside synergy cases.