Treat Candy Company is evaluating the possible acquisition of Fluff Chocolate Inc. at year- end 2020. Treat’s analysts have separately estimated the following information for Fluff as a stand-alone entity, as well as the synergies the merger is expected to generate. Stand-alone Fluff Inc. Data Net Income Depreciation Capex plus Working Capital Number of shares of equity outstanding Cost of Equity of stand-alone Fluff Inc. Growth in FCFE beyond 2021 The firm typically finances 25% of its capex and working capital with new debt. Expected Synergies from the merger Incremental annual perpetual FCFE from synergies Appropriate discount rate for the synergy cash flows $ 70,000,000 9.75% 2021 $ 144,701,570 $ 100,567,859 $ 310,828,430 21 Million 8.68% 5.8% per year forever.

a) Estimate the per share stock price of stand-alone Fluff Inc. as of year-end 2020.

b) Asofyear-end2020,whatis the total value of synergies from the merger?

c) As of year-end 2020, what is the merger value of Fluff Inc. to Treat Company?

d) If Treat offers a price of $39 for each share of Fluff, what is the NPV of the acquisition to Treat Company? To Fluff Inc.?