Harrods PLC has a market value of $310 million and 11 million shares. Selefridge Department Store has a market value $121 million and 6 million shares. Harrods is considering acquiring Selfridge. Post-acquisition, the combined value of Harrods is expected to be $475 million including the synergy. Harrods is considering both a cash offer and an exchange of share approach. Selfridge can be acquired at a premium of $13 million over its market value. Alternatively, Harrods is also considering making an exchange of share offer to acquire Selfridge.

a. What is the expected synergy of the cash offer to Harrods?

b. What is the stock price for Harrods post cash-acquisition?

c. What is the NPV of the acquisition?

d. What exchange ratio between the two stocks would make the value of the stock offer equivalent to the cash offer?