Brooks Plumbing Products Inc. (BPP) manufactures plumbing fixtures and other home improvement products that are sold in Hom Depot and Walmart as well as hardware stores. BPP has a solid reputation for providing value products, good quality, and a good The company has been approached by an investment banking firm representing a third company, Garden Specialties Inc. (GSI), th interested in acquring BPP. The acquiring firm (GSI) is a retailer of garden supplies, it sees the potential synergies of the combine and is willing to pay BPP shareholders $40 cash per share for their stock, which is greater than the current stock price; the stock traded at about $35 in recent months. Summary financial information about BPP follows BROOKS PLUMBING PRODUCTS INC Selected Financial Information For the Years Ended December 31 2019 Industry Average 2019 2018 Cash Accounts receivable Inventory Long-lived assets $ 80,049,778 3,586, 227 87,437,771 60,026,645 56,908,465 39,795,416 Gross book value 167,408,377 100,750,809 170,717,409 68,864,002 119,175,766 32,127,364 126,071, 338 23,630,000 668,834,771 143,908,377 96,017, 302 188,595, 338 67,465,209 121,138,274 38,028,302 87,771,369 13,120, 336 640,076,465 Net book value Replacement cost Liquidation value Current liabilities Long-term debt Shareholders' equity Capital expenditures Sales Cost of sales Operating expense Income tax rate Depreciation expense Dividends Year-end stock price Number of outstanding shares Sales multiplier Free cash flow multiplier Earnings multiplier Cost of capital Accounts receivable turnover Inventory turnover Current ratio Quick ratio Cash flow ratio Free cash flow rat Gross margin percentage Return on assets (net book value) Return on equity Earnings per share 499,307,788 102,797,355 478,141,001 134,895,229 38% 38% 38 . 00% 18,896,493 2,880,000 15,794,254 1,380,0e0 24.29 24,063, 554 37.08 $ 26,989,554 1.30 8.80 13.40 65% 6.5% 6.80 8.60 1.80 1.20 1.30 1.20 32. 0% 21.0% 30.0% io $ 2.30 Operating expense includes depreciation expense Multiples-based method Free cash flow 4. Discounted cash flow method