9.5 GLD Corp. is investigating the possible acquisition of Stopper Systems, Inc. The following data are available:

GLD Stopper Systems EPS $4.00 $2.20 Dividend per share $1.20 $0.60 Number of shares 6,000,000 2,000,000 Stock price $10.00 $5.00 The cost of equity of both GLD and Stopper Systems is 15%. The merged firm is expected to grow at 5% per year and to increase its dividend at 5% per year from the current aggregate dividend of the two companies. GLD plans to offer 0.6 shares of its own stock for every share of Stopper Systems.