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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.

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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. Shares outstanding Price per share Firm B 5,000 $ 42 Firm T 1,600 $ 17 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $9,000. a. If Firm T is willing to be acquired for $19 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 $19 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 $ 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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