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		6,400			1,600
Price per share	$	48		$	19

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,900.

a.	If Firm T is willing to be acquired for $21 per share in cash, what is the NPV of the merger?

NPV

$

b.	What will the price per share of the merged firm be assuming the conditions in (a)? (Round your answer to 2 decimal places. (e.g., 32.16))

Share price

$

c.	If Firm T is willing to be acquired for $21 per share in cash, what is the merger premium?

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 your 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

$