Following is a table of projected after tax cash flows, their respective discount rates, and values after the acquisition of DrugShop Limited (DSL) by Lawslob Enterprises (LLE). Fill in the blanks and calculate the stock price of the new firm if it has debt/equity ratio of 3/5 and 100 million shares outstanding.

Net Cash Flow

($ million) starting Growth Discount Value

one year from now Rate (%) Rate (%) ($ million)

DSL (on its own) 180 3 ---- 1500

LLE (on its own) 800 -2 10.5 ----

Acquisition Benefits 49 4 ---- 500

Rev. Enhancement 20 6 14 ----

Cost Reduction 20 4 16.5 ----

Tax Shelters 9 2 12 ----

DSL+LLE 1029 2 ---- ----