Growth Corp is trading at $102 per share on 11/1/16 when it makes a bid of 0.667 shares of Growth Corp for each outstanding share of Targ Corp. Targ has 40 million shares outstanding, and Growth Corp has approximately 30 million shares outstanding. Targ closed at $50 per share on 10/31/16.

On 11/19/16, Bidden Corp. makes a bid of 2.5 shares of Bidden's stock for each share of Targ. Bidden is trading at $29 on 11/19/16 with 90 million shares outstanding.

The fair market value of Targ's net identifiable assets is $1,020 million at the time of the offers. Targ's expected earnings for 2016 are $250 million.

Growth Corporation's earnings for 2016 are expected to be $125 million. Bidden Corporation's earnings for 2016 are expected to be $330 million.

a. How much of a percentage premium over the market price was Growth Corporation prepared to pay for Targ?

b. Assuming the stock market is efficient, why would one company be prepared to pay a premium over current market value to acquire another company?