Firm A has a value of $500 million and Firm B has a value of $300 million. Firm A has 1000 shares outstanding, and Firm B has 1000 shares outstanding. Suppose that the merger would increase cash flows of the combined firm by $5 million in perpetuity. Assuming the cost of capital for the new firm is 10%. Suppose that instead of paying cash, Firm A acquires B by offering two (new) shares of A for every three shares of B. The net gain to Firm A's shareholders is closest to: O A. $0 O B. $10 million O C. $20 million O D. $87 million O E. None of the above Alpha Corporation has earnings before interest and tax (EBIT) per annum in perpetuity of $28,714. The tax rate is 30%. The firm is funded $50,000 of debt and $100,000 of equity. The cost of equity is 18% and the cost of debt is 696. Given the information above, what is the appropriate discount rate if net profit after tax (NPAT) is used to calculate the equity value of the firm? O A. 19.1496 O B. 25.7196 O C. 1896 O D. 69 O E. None of the above