If there are no synergy gains, what will the share price of A be after the merger' What will the price-earnings ratio be? What does your answer for hare price tell you about the amount A bid for BP. Was it too high? Too low? Explain Merger NPV Show that the NPV of a merger can be expressed as the value of the synergistic benefits, Delta V, less the merger premium. Merger NPV Fly-By-Night Couriers is analyzing the possible acquisition of Flash-in-the-Pan Restaurants. Neither firm has debt. the forecasts of Fly-By-Night show that the purchase would increase its annual after tax cash flow by $390,000 indefinitely. the current market value of Flash-in-the-Pan is $7 million. the current market value of Fly-By-Night is $22 million. the appropriate discount rate for the incremental cash flows is 8 percent. Fly-By-Night is trying to decide whether it would offer 30 percent of its stock or $9 million in cash to Flash-in-the-Pan. What is the synergy from the merger' What is the value of Flash-in-the-Pan to Fly-By-Night? What is the cost to Fly-By-Night of each alternative? What is the NPV to Fly-By-Night of each alternative? What alternative should Fly-By-Night use? Merger NPV Harrods PLC has a market value of pound 400 million and 30 shares outstanding. Selfridge Department Store has a market value of pound 160 million and 18 million shares outstanding. Harrods is contemplating acquiring Self rid. Harrods's CFO concludes that the combined firm with synergy will be worth pound 590 million, and Selfridge can be acquired at a premium of pound 15 million