As treasurer of Leisure Products, Inc., you are investigating the possible acquisition of Plastitoys. You have the following basic data:

	Leisure Products			Plastitoys
Forecast earnings per share	$	5		$	1.50
Forecast dividend per share	$	3		$	.80
Number of shares		1,000,000			600,000
Stock price	$	90		$	20

You estimate that investors currently expect a steady growth of about 6% in Plastitoys' earnings and dividends. You believe that Leisure Products could increase Plastitoys' growth rate to 8% per year, starting next year, without any additional capital investment required.

a.	What is the gain in stock price from the acquisition? (Enter your answer in millions. Do not round intermediate calculations.)

Acquisition gain

$

b.	What is the cost of the acquisition if Leisure Products pays $25 in cash for each share of Plastitoys?(Enter your answer in millions. Do not round intermediate calculations.)

Acquisition cost

$

c.	What is the cost of the acquisition if Leisure Products offers one share of Leisure Products for every three shares of Plastitoys? (Enter your answer in millions. Do not round intermediate calculations.)

Acquisition cost

$

d.	How would the cost of the cash offer and the share offer alter if the expected growth rate of Plastitoys were not increased by the merger? (Enter your answer in millions. Do not round intermediate calculations.)

Cost of cash offer	$
Cost of share offer	$