Fruity Food Co. is financed by 100 percent equity and has 10 million ordinary shares in issue currently trading at a price of 5.20. Fruity Food Co. is considering a takeover of another all equity financed firm Cupcakes Co. which operates in the same industry. Cupcakes Co. has 4 million ordinary shares in issue with a share price of 3.50. Fruity Food Co. estimates the takeover will generate synergy gains worth a present value of 5 million. The shareholders of Cupcakes Co. will accept an offer of a 20% premium on the current share price. Required: (i) Calculate the post takeover value of a share in Fruity Food Co. if the takeover is financed solely by cash. Show your workings. [4 marks] In a share-for-share exchange, calculate how many shares Fruity Food Co. would need to issue to the shareholders of Cupcakes Co. Show your workings. (ii) [5 marks)