Alpha Inc. is consering acquisition of Beta Corp. Both firms are all equity firms.

Alpha Inc. projected an increase in after-tax cash flows by 330107 indefinitely.

Beta Corp. is currently valued in the market at 8148413 USD

Alpha Inc. is valued at 21321116 USD

Alpha Inc. has established that appropriate discount rate for incremental cash flows is 9%

Alpha Inc. is deciding to either pay 30% of its stock or 13463604 in cash.

Find

         a) Present Value of Incremental Cashflow

 

   b) Total Value of Beta Corp. to Alpha Inc.?

 

   c) Cost of Stock Payment

 

    Cost of Cash Payment

 

   d) NPV of merger with Stock Payment

 

    NPV of merger with Cash Payment