Aussie Ltd is considering the acquisition of Kiwi Ltd. Both companies are 100% equity financed. The values of the two companies as separate entities are $30 million and $14 million, respectively. Each company has 3 million shares outstanding. Aussie estimates that by combining the two companies, it will reduce the selling and administrative costs by $100,000 p.a. in perpetuity with no change in risk. Aussie will pay for Kiwi by offering one (new) Aussie share for every two Kiwi shares.