10. Firm A is considering acquiring Firm B. There are 1,000 shares of Firm A stock outstanding and 600 shares of Firm B stock outstanding. Both firms agree on the following data:

PV_A = 2,000

PV_B = 600

PV_AB= 3,000

(a) [5 points] What is the total synergy gain from this merger?

(b) [5 points] What is the highest amount of cash that Firm A would be willing to pay to acquire Firm B in a cash acquisition?

(c) [5 points] What is the highest number of shares that Firm A would be willing to pay to acquire Firm B in a stock acquisition?