A large manufacturing firm (Buyer) wants to diversity horizontally by acquitting a smaller firm in the same industry (Target). The Buyer intends to offer shareholders of the Target $16.00 per share for all of their outstanding shares. The Buyer believes that the synergy created by this acquisition will generate an additional $4 million in annual earnings above the current earnings of the two firms. The Cost of Capital (Discount Rate) of the Buyer is 20%. Current information on the market status of the two firms is as follows: Target Buyer Market Price/Share Shares Outstanding $26.00 10 million $15.00 8 million What would be the expected value of the shares of the Buyer and Target companies following this acquisition? Show the calculations you use to derive your answer.