In the table below we have figures about the companies B(idder) and T(arget) as independent entities. Both B and T are fully funded with equity. B acquires T. B pays the stockholders of T with 100,000 new shares of B. The synergy of the acquisition is 0. Assume that B can mislead the market (put differently: the market perceives the P/E ratio of B identical before and after the acquisition).

Question: What is the net present value of the acquisition for the stockholders of T?

In the table below we have figures about the companies Blidder) and Target) as independent entities. Both B and T are fully funded with equity. B acquires T. B pays the stockholders of T with 100,000 new shares of B. The synergy of the acquisition is 0. Assume that B can mislead the market (put differently: the market perceives the P/E ratio of B identical before and after the acquisition) T B Value of equity 40,000,000 P/E ratio 20 Number of Shares Outstanding 400,000 Price (per share) 100 Total Earnings 2,000,000 Earnings per Share 5 10,000,000 10 100,000 100 1,000,000 10