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BQ, Inc., is considering making an offer to purchase iReport Publications. The vice president of finance has collected the following information: BQ iReport Price-earnings ratio

BQ, Inc., is considering making an offer to purchase iReport Publications. The vice president of finance has collected the following information:

BQ iReport
Price-earnings ratio 14.6 9.3
Shares outstanding 1,200,000 180,000
Earnings $ 3,900,000 $ 645,000
Dividends $ 890,000 $ 340,000

BQs outside financial consultants think that the 7 percent growth rate is too optimistic and a 6 percent rate is more realistic.

f-1.

What is the value of iReport to BQ now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

f-2. What would BQs gain be from this acquisition? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
f-3. If BQ were to offer $40 in cash for each share of iReport, what would the NPV of the acquisition be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
f-4. Whats the most BQ should be willing to pay in cash per share for the stock of iReport? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
f-5. If BQ were to offer 180,000 of its shares in exchange for the outstanding stock of iReport, what would the NPV be? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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