2. Delta Airlines and Northwest Airlines are negotiating a friendly acquisition of Northwest Airlines by Delta Airlines. The management teams at both companies have informally agreed upon a transaction value of about $9.90 per share of Northwest Airlines stock but are presently negotiating alternative forms of payment. Ralph Stefan, DFA, works for an investment banking team which is evaluating three alternative offers presented by Delta Airlines 1. Cash Offer: Delta Airlines will pay $ 10.00 per share of Northwest Airlines Stock. 2. Stock Offer: Delta Airlines will give Northwest Airlines shareholders 1.25 of Delta Airlines stock per share of Northwest Airlines stock. 3. Mixed Offer: Delta Airlines will pay $8.00 plus 0.25 shares of Delta Airlines stock per share of Northwest Airlines stock. Ralph estimates that the merger of the two companies will result in economies of scale which is expected to earn synergies of $2 billion dollars annually for the next four years. To aid in the analysis, Ralph has also com