1. An acquiring firm is analyzing the possible acquisition of a target firm. Both firms have no debt. The acquiring firm believes the acquisition of the target firm will increase its total after-tax annual cashflows by $5.2 million per year forever. The appropriate discount rate for the incremental cash flow is 8%. The current market value of the target firm is $65 million, and the current market value of the acquiring firm is $150 million. If the acquiring firm pays $130 million in cash two at the target firm's shareholders, what is the value of the merged firm