Attachment is available, please make sure you answer all questions. Thx

18.3 Tax benefits and price Hahn Textiles has a tax loss carryforward of $800,000. Two firms are interested in acquiring Hahn for the tax loss advantage. Reilly Investment Group has expected earnings before taxes of $200,0o per year for each of the next seven years and a cost of capital of 15%. Webster Industries has expected earnings before taxes for the next 7 years as shown in the table below. Webster Industries Year Earnings before taxes 1 $80,000 2 120,000 3 200,000 4 300,000 5 400,000 6 400,000 7 500,000 Both Reillys and Websters expected earnings are assumed to fall within the annual limit legally allowed for application of the tax loss for carry forward resulting from the proposed merger (see footnote 2 page 727). Webster has a cost of capital of15%. Both firms are subject to a 40% tax rate on ordinary income. a) What is the tax advantage of the merger each year for Reilly? b) What is the tax advantage of the merger each year for Webster? c) What is the maximum cash price each interested firm would be willing to pay for Hahn Textiles? (Hint; calculate the present value of the tax advantage). d) Use your answers in parts a through c to explain why a target company can have different values to different potential acquiring firms. 18.12 Holding company Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets fore these companies Liabilities and stockholders equity Scully Corporation Common stock holdings Long-term debt $40,000 Company A Preferred stock 25,000 Company B Common stock equity 35,000 Total Current liabilities Current assets Fixed assets Total Current assets Fixed assets Total Company A $180,000 400,000 Company B 720,000 $100,000 $100,000 Long-term debt 200,000 Common stock equity 200,000 Total Current liabilities $500,000 $100,000 Long-term debt 500,000 Common stock equity Total 300,000 900,000 a) What percentage of the total assets controlled by Scully Corporation dose its common stock equity represents. b) If another company owns 15% of the common stock of Scully Corporation and, by virtue of this fact, has voting control, what percentage of all the total assets controlled dose the outside companys equity represents? c) How does a holding company effectively provide a great deal of control for a small dollar investment? d) Answer parts a, and b in light of the following facts. 1) Company A,s fixed assets consist of $20,000 of a common stock in Company C. This level of ownership provides voting control. 2) Company C,s total asset of $400,000 includes $15,000 of stock in company D, which gives company C voting control over Company D,s $50,000 of total assets. 3) Company B,s fixed assets consist of $60,000 of stock in both Company E and F. In both cases, this level of ownership gives it voting control. Company E and F have total assets of $300,000 and $400,000 respectly. Just before the public learned about the potential LBO of Dell, Inc., the company's stock price was trading for $10 per share. What is the size of the premium that Silver Lake and Michael Dell were offering public shareholders? In July 2013, an independent firm that advises institutional investors on how they should cast their votes at shareholders meetings issued a letter backing Michael Dell's offer. The firm argued that in the LBO transaction, shareholders would receive a premium "with certainty," whereas with Carl Icahn's offer, it was uncertain whether the value of the company would ultimately be higher than the proposed LBO price. If you were a Dell shareholder, how would that advice affect your vote