Consider the following pre-merger information about Mawar Berhad and Melor Berhad:

	Mawar Berhad	Melor Berhad
Number of shares outstanding	20,000	12,000
Price per share	RM12.00	RM6.00

Mawar Berhad is considering acquiring Melor Berhad as part of the companys strategic plan to increase efficiency through economic of scale in its core business. Mawar Berhad is evaluating two possible options either to pay RM5.25 in cash for every share of Melor Berhad or to offer two (2) of its shares in exchange for ten (10) shares of Melor Berhad. Both firms are 100% equity-financed. Mawar Berhad estimates that the incremental benefits from this exercise to be worth RM50,000.

From the above information:

Should Mawar Berhad proceed with the merger? If yes, which alternative should Mawar Berhad choose?