In this question we revisit the example of Acme stock purchase vs. Acme asset purchase with the following alternative assumptions (i.e., everything else is assumed the same): (i) marginal corporate tax rate for Acme is 10% and (ii) capital gains tax rate for Acme shareholders is 20% and (iii) the purchase price is $200 million (so therefore the gross consideration offered to shareholders of Acme is $200 million net of assumed liabilities of $40,299,000). Please answer the following questions and show your calculations (in Excel):

a. Please calculate the net value to shareholders of Acme if they sell using an asset purchase.

b. Please calculate the net value to shareholders of Acme if they sell using a stock purchase.

c. Please calculate the PV of the tax shield generated by the amortization of the goodwill. Please assume for the purposes of this question that the difference between the purchase price and the book value of assets is 100% allocated to goodwill. Please further assume a 4% discount rate in evaluating the present value of the goodwill generated tax shields.

d. Given the above calculations, which transaction structure (asset purchase or stock purchase) would you recommend to the buyer? Which transaction structure would you recommend to the seller?