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	15.2	9
Shares outstanding	1,100,000	160,000
Earnings	$ 4,200,000	$ 660,000
Dividends	$ 920,000	$ 370,000

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.

BQs outside financial consultants think that the 6 percent growth rate is too optimistic and a 5 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 140,000 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.)