$3.$ XYZ is planning to acquire ABC firm. The resulting synergy is expected to be $150.$ In a friendly negotiation, ABC shareholders asked for $$50$ premium. The value of both firms before merger is as follows: $(5-$point$)$

$--------------------$XYZ ABS

MV $800500$

# of shares $10050$

Price $810$

a$)$ Compute the Value of XYZ after the question if the acquisition is cash acquisition $(1-$point$)$ ANS: $900$

b$)$ Compute the NPV for XYZ if the acquisition is stock acquisition $(2-$point$)$ ANS: $100$

c$)$ Compute Total Shares after merger if the acquisition is stock acquisition $(2-$point$)$ ANS: $58$