27. Consider the following details relating to the proposed takeover bid by Melbourne Ltd (the bidder) of Sydney Ltd (the target). Melbourne Ltde Sydney Ltda Number of shares 50,000 10,000 Price per share (four weeks $20 prior to the bid announcement) $250 Price per share (the end of the day of the announcement) $20 $282 You are engaged by Melbourne Ltd to assess the bid and you analyse the potential synergies from the acquisition. You estimate that Melbourne Ltd will be able to generate revenue synergies of $60,000 p.a. in perpetuity from the acquisition starting one year from today. You also find that integration costs will increase for the organisation as a result of merging the firm and that these will amount to $40,000 p.a. in perpetuity starting at the same time as the revenue synergies. You also report that the appropriate discount rate for the merged firm would be 10% p.a. 27 (a). What is present value of the stream of synergistic benefits? 27 (b). What cash price per share must be paid in return for each single share in Sydney Ltd if the objective of Melbourne Ltd is to provide a premium of 20% above the value of Sydney Ltd shares where that value reflects Sydney Ltd operating as an independent entity? [express your final answer to 2 decimal places] 27 (c). What is the TOTAL NET COST and NPV of the bid to Melbourne Ltd shareholders given the compensation provided in 27 (b)