Clood Co. is considering acquisition of Tood Co. Some financial information on the two companies is even below lin 5 million): Clood Co. Price per share # of shares h Market value If Cfood acquires Tfood, the operating cost after caxi can be reduced by $2m and sales fafter tax) can be increased by Sam (the synergies) per year in perpetuity: The cost of capital is 1920 Cfood is considering two alternatives for the acquistion: 1. buying all the shares of Tfood at $15.6 per share. 2. Issuing 1 shares for every 3 shares of Trood Workout on this merger deal and answer the following questions. 1. What is the economic gain from the merger? [2 marks it. What will be the NPV of merger under cash offer? (5 marks) it. What will be the market value of merged company ICtood after the acquition of Trood) under the dash offer: 12 marks iv. What is the cost of merger under stock offering? Also compute the merger's NPV for Cfood's onginal shareholders. [9+2 marks v. What will be market value of Thood after acquisition of Tfood using stock financing? [2 marks)