Consider the following premerger 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		5,600			1,500
Price per share	$	54		$	24

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,000.

a.	If Firm T is willing to be acquired for $26 per share in cash, what is the NPV of the merger? (Do not round intermediate calculations.)

NPV

$

b.	What will the price per share of the merged firm be assuming the conditions in (a)? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Share price

$

c.	If Firm T is willing to be acquired for $26 per share in cash, what is the merger premium? (Do not round intermediate calculations.)

Merger premium

$

d.	Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers one of its share for every two of T 's shares, what will the price per share of the merged firm be? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Price per share

$

e.	What is the NPV of the merger assuming the conditions in (d)? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

NPV

$