$8.$Cash versus Stock as PaymentConsider the following premerger information about a bidding firm $($Firm B$)$ and a target firm $($Firm T$).$ Assume that both firms have no debt outstanding.

$$ Firm B Firm T

Shares outstanding $8,7003,600$

Price per share $$47$ $$19$

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $$16,700.$

a$.$If Firm T is willing to be acquired for $$21$ per share in cash, what is the NPV of the merger?

b$.$What will the price per share of the merged firm be assuming the conditions in $($a$)?$

c$.$In part $($a$),$ what is the merger premium?

d$.$Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one of its shares for every two of T$$s shares, what will the price per share of the merged firm be$?$

e$.$What is the NPV of the merger assuming the conditions in $($d$)?$