Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding.

	Firm B			Firm T
Shares outstanding		5,200			1,800
Price per share	$	43		$	18

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $9,100.

a. If Firm T is willing to be acquired for $20 per share in cash, what is the NPV of the merger? (Omit $ sign in your response. Negative answers should be indicated by a minus sign.)

b. What will the price per share of the merged firm be, assuming the conditions in (a)? (Round the final answer to 2 decimal places. Omit $ sign in your response.)

c. If Firm T is willing to be acquired for $20 per share in cash, what is the merger premium? (Omit $ sign in your response.)

d. Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one of its shares for every two of T's shares, what will the price per share of the merged firm be? (Round the final answer to 2 decimal places. Omit $ sign in your response.)

e. What is the NPV of the merger assuming the conditions in (d)? (Round the final answer to 2 decimal places. Omit $ sign in your response. Negative answers should be indicated by a minus sign.)

NPV $