Firms A and Firm B are both all-equity firms. Firm A would like to acquire Firm B. You are provided the information in the table below. You are also told that the synergy value of the deal is $1,700,000. Company A has Shares Outstanding of 1,000,000, share price of $55 and earnings of $1,455,000. Company B has Shares Outstanding of 750,000, Share price of $37 and earnings of $780,000.

Firm A is considering offering $39 per share to Firm B. What would be the NPV for Firm A? A) $1,500,000 B) $2,700,000 C) $3,200,000 D) $1,700,000 E) $200,000

42. Instead of the $39 cash offer, Firm A wishes to exchange 450,000 of its shares for all the shares of Firm B. What would be the share price of the merged company? A) $58.24 B) $84.45 C) $187.67 D) $57.00 E) $55.00