3A. (20 points) BigCo is buying LittleCo, using shares. BigCo's cost of capital is 10.2%, and LittleCo's cost of capital is 19.4%. Both firms are all equity. If the merger goes through, BigCo will give LittleCo access to foreign markets, increasing its EBIT by $56,059 per year in perpetuity. The tax rate is 23%. BigCo has a share price of $23, with 249,492 shares outstanding. LittleCo has a share price of $15, with 55,260 shares outstanding. What is the largest number of shares in the merged firm that BigCo could justify giving LittleCo's shareholders in exchange for all of their holdings in LittleCo? Please give your answer to the nearest share.

3B. (10 points) Please give two reasons that BigCo might have chosen to pay for the merger with shares instead of cash.