eBook Problem 7-48 (10. 3, 5) Shepherd Corporation is considering acquiring RentCo by exchanging its stock (value of $20 per share) for RentCo's only asset, a tract of land (adjusted basis of $150,000 and no liability). The yearly net rent that RentCo receives on the land is $50,000. Shepherd anticipates that it will receive the same net rent for the land over the next 20 years. At the end of that time, it will sell the land for $400,000. Assume that Shepard uses a 10% discount rate and is in the 25% state and Federal income tax bracket for all years. Determine what type of reorganization is being contemplated by this transaction by answering the questions below. Click here to access the present value tables. Round dollar amounts to the nearest dollar and round the number of shares to the nearest whole number. a. Compute the net (after taxes) yearly cash flow. S b. Compute the NPV of yearly cash flow. c. Compute the after-tax cash flow from sale of land. S d. Compute the NPV of cash flow from sale of land. S e. Compute the NPV of the Rentco stock. f. What is the maximum number of shares that RentCo shareholders can expect Shepherd to offer for 100% of their RentCo stock? shares g. What type of reorganization is this contemplated transaction?