Calculating NPV: Foxy News, Inc., is considering making an offer to purchase Pulitzer

Publications. The vice president of finance has collected the following information:

Foxy also knows that securities analysts expect the earnings and dividends $($currently

$$0\mathrm{.}88$ per share$)$ of Pulitzer to grow at a constant rate of $3$ percent each year. Foxy

management believes that the acquisition of Pulitzer will provide the firm with some

economies of scale that will increase this growth rate to $5$ percent per year.

a$.$ What is the value of Pulitzer to Foxy?

b$.$ What would Foxy's gain be from this acquisition?

c$.$ If Foxy were to offer $$15$ in cash for each share of Pulitzer, what would the NPV of

the acquisition be$?$