Al's is analyzing the possible acquisition of Baker's. Both firms have no debt. Al's believes the acquisition will increase its total aftertax annual cash flows by $4,700,000 indefinitely. The current market value of Baker's is $184,600,000, and that of Al's is $316,600,000. The appropriate discount rate for the incremental cash flows is 8 percent. Al's is considering offering 35 percent of its stock for the acquisition. To Als the value of Bakers is ________, while the cost of the stock offer is ________.

Multiple Choice

• $184,600,000; $195,982,500

• $243,350,000; $195,982,500

• $58,750,000; $64,610,000

• $243,350,000; $110,810,000

• $184,600,000; $110,810,000

Al's is analyzing the possible acquisition of Baker's. Both firms have no debt. Al's believes the acquisition will increase its total aftertax annual cash flows by $4,700,000 indefinitely. The current market value of Baker's is $184,600,000, and that of Al's is $316,600,000. The appropriate discount rate for the incremental cash flows is 8 percent. Alls is considering offering 35 percent of its stock for the acquisition. To Al's the value of Baker's is while the cost of the stock offer is Multiple Choice $184,600,000; $195,982,500 $243,350,000; $195,982,500 $58,750,000; $64,610,000 Al's is analyzing the possible acquisition of Baker's. Both firms have no debt. Al's believes the acquisition will increase its total aftertax annual cash flows by $4,700,000 indefinitely. The current market value of Baker's is $184,600,000, and that of Al's is $316,600,000. The appropriate discount rate for the incremental cash flows is 8 percent. Alls is considering offering 35 percent of its stock for the acquisition. To Al's the value of Baker's is while the cost of the stock offer is Multiple Choice $184,600,000; $195,982,500 $243,350,000; $195,982,500 $58,750,000; $64,610,000