14. A "corporate takeover" occurs when one corporation buys another company because it believes it can raise that company's profit by managing it more effectively. a. Suppose that the company being taken over (the "takeover target") currently earns a profit ("earnings") of $10 million, that it expects its profits to grow at a steady rate of 2 percent per year forever, and that the interest rate is 7 percent. What is the value of the takeover target? b. Now suppose that the company taking control of the takeover target expects to increase the takeover target's earnings growth to 3 percent per year forever. What would be the value of the takeover target after the proposed takeover? How much additional value would be generated by the takeover? c. Whom would this newly generated value enrich (i.) if the new owners are the only ones capable of increasing the earnings growth to 3 percent, and (ii.) if many corporations would be able to raise the company's earnings growth to 3 percent? 14. A "corporate takeover" occurs when one corporation buys another company because it believes it can raise that company's profit by managing it more effectively. a. Suppose that the company being taken over (the "takeover target") currently earns a profit ("earnings") of $10 million, that it expects its profits to grow at a steady rate of 2 percent per year forever, and that the interest rate is 7 percent. What is the value of the takeover target? b. Now suppose that the company taking control of the takeover target expects to increase the takeover target's earnings growth to 3 percent per year forever. What would be the value of the takeover target after the proposed takeover? How much additional value would be generated by the takeover? c. Whom would this newly generated value enrich (i.) if the new owners are the only ones capable of increasing the earnings growth to 3 percent, and (ii.) if many corporations would be able to raise the company's earnings growth to 3 percent