apter 26 Review 6 Seved 3 Penn Corp. is analyzing the possible acquisition of Teller Company. Both firms have no debt. Penn believes the acquisition will increase its total aftertax annual cash flows by $3.9 million indefinitely. The current market value of Teller is $101 million, and that of Penn is $159.9 million. The appropriate discount rate for the incremental cash flows is 11 percent. Penn is trying to decide whether it should offer 43 percent of its stock or $127.9 million in cash to Teller's shareholders. What is the cost of the cash alternative? eBook References What is the cost of the stock alternative? ME Grow HII