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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.
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 has estimated that the value of the synergistic benefits from acquiring Firm T is $8,100. a. If Firm T is willing to be acquired for $27 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.) NPV $ 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.) Price per share $ c. If Firm T is willing to be acquired for $27 per share in cash, what is the merger premium? (Omit " $ " sign in your response.) Merger premium $ 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.) Price per share 9 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 $
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