Gold Ltd is considering the possibility of acquiring Silver Ltd. Both companies are unlevered (have no

debt). Gold Ltd believes that the acquisition will increase its total after tax annual cash flows by N$4.2

million indefinitely. The current market value of Silver Ltd is N$80 million, and that of Gold Ltd is N$145

million. The appropriate discount rate for the incremental cash flows is 12%. Gold Ltd is deciding

whether it should offer 45 per cent of its share or N$98 million in cash to Silver Ltd's shareholders.