4 (11 marks): Kaia Restaurants is considering an acquisition for a rival Super Restaurants. Both firms have no debts. The forecast of Kaia show that the purchase would increase its annual after-tax cash flow by $425,000 perpetually way forward. The current market value of Kaia is $22 million. The current market value of Super is $8.8 million. The appropriate discount rate for the incremental cash flows is 8%. Kaia is trying to decide whether it should offers 35% of its stock, or $12 million in cash to Super's shareholders. a) What is the synergy from the acquisition? (2 marks) b) What is the value of Super to Kaia? (2 marks) c) What is the cost to Kaia of each alternative (stock acquisition vs cash acquisition)? (2 marks) d) What is the NPV to Kaia of each alternative? (4 marks) e) Which alternative should Kaia use? (1 mark)