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

	BQ	iReport
Price-earnings ratio	12.2	8.8
Shares outstanding	1,500,000	165,000
Earnings	$ 4,600,000	$ 680,000
Dividends	$ 960,000	$ 410,000

BQ also knows that securities analysts expect the earnings and dividends of iReport to grow at a constant rate of 4 percent each year. BQ management believes that the acquisition of iReport will provide the firm with some economies of scale that will increase this growth rate to 6 percent per year.

a.	What is the value of iReport to BQ? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	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.)
c.	If BQ were to offer $36 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.)
d.	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.)
e.	If BQ were to offer 190,000 of its shares in exchange for the outstanding stock of iReport, what would the NPV be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)