8. Fastenal is contemplating the potential acquisition of Advanced Web Distribution Company, Inc. (AWDC)an entity that possesses technology Fastenal believes it could use to enhance its product distribution. Assume the values of the two entities are $30 billion and $5 billion, respectively. Fastenal believes that by combining the two entities it will reduce marketing and administrative expenses by $500 million annually in perpetuity. Fastenal is willing to pay $7.5 billion in cash for AWDC. Fastenals opportunity cost of capital is 8.00%. What, if any, is the gain from the merger? What is the cost of the cash offer? What is the NPV of the acquisition under the cash offer? What if instead of paying cash, Fastenal offers the shareholders of AWDC, a 25% holding in Fastenal? What is the value of the stock in the merged company held by the original shareholders of AWDC? What is the cost of the stock alternative? What is the mergers NPV under the stock offer? Should Fastenal proceed with this transaction? Can you identify a better public company for it to acquire? If so, what should it pay? (500 Words).