6) Trans World Communications, Inc., a large telecommunications company, is evaluating the possible acquisition of Georgia Cable Company (GCC), a regional cable company. Trans World's analysts project the following post-merger data for GCC (in thousands of S): 2020 450 45 18 02 518 53 21 2022 Net Sales Selling & Admn. Expenses Interest Expense 2023 600 68 27 60 24 Additional Date: Tax rate after the merger Cost of goods sold as a % of sales Beta after the merger Risk-free rate Market risk premium Terminal growth rate of cash flow If the acquisition is made, it will occur on Dec. 31, 2019. All cash flows shown in the income statement are assumed to occur at the end of the year. Depreciation-generated funds would be used to replace worn-out equipment, so they would not be available to Trans World's shareholders. 35% 65% 1.50 8% 4% 7% a) What is the appropriate discount rate for valuing the acquisition? b) What is the value of GCC to Trans World? c) If GCC currently has 25,000 shares of common stock outstanding, what is the maximum price per share that Trans World should offer for GCC's shares? If the tender offer was accepted at this maximum price, what is the NPV of the acquisition to Trans World