9.8 E-III Corp. is investigating the possible acquisition of Reluctant, Inc. The following data are available:

E-III Reluctant EPS $2.00 $3.20 Dividend per share 0 $1.60 Number of shares 8,000,000 3,000,000 Stock price $4.00 $8.00 The costs of equity are 17% for E-III and 15% for Reluctant. E-III plans to offer

$5.00 cash and 1.5 shares of its own stock for each share of Reluctant.