Bristol Myers, Inc., is considering making an offer to purchase Celgene Corp. in 2020. Bristol Myers vice president of finance has collected the following information that reflects current financial highlights of both companies:

	Bristol Myers	Celgene
Price-earnings ratio	15.5	11
Shares outstanding	1400000	720000
Earnings	$4,000,000	$980,000
Dividends	$950,000	$450,000

Bristol Myers is also aware that several analysts forecast the earnings and dividends of Celgene to grow at a constant rate of 4 percent each year. However, Bristols management believes that the acquisition of Celgene will provide the firm with some economies of scale and scope that will increase this growth rate to 6 percent per year. Required: a. What is the value of Celgene to Bristol? b. What would Bristols gain be from this acquisition? c. If Bristol were to offer $19 in cash for each share of Celgene, what would the NPV of the acquisition be? d. What is the most Bristol should be willing to pay in cash per share for the stock of Celgene? e. If Bristol were to offer 220,000 of its shares in exchange for the outstanding stock of Celgene, what would the NPV be? f. Should the acquisition be attempted? If so, should it be as in (c) or as in (e)?