Jackson Enterprises (JE) is offering a 25% takeover premium to Michael Studios, Inc (MSI) for the firms 2 million outstanding shares, which are currently trading for a pre-offer price of 20 per share. The balance sheet for MSI is: Assets Liabilities Current $15,000,000 Current $7,500,000 Fixed $45,000,000 Long-Term $25,000,000 Total $60,000,000 Total $32,500,000 Owners equity $27,500,000 Total liabilities and equity $60,000,000 The market value of MSIs fixed assets is $60,000,000. The sales (in millions) for the industry by company are: Sales ABC $89 CWC $66 DEF $35 JE $45 KOJ $42 MSI $18 SEE $76 1. Determine the amount Jackson Enterprises is willing to pay in terms of goodwill. 2. If JEs shares are currently trading at $62.43m then how many shares should JE offer for every share of MSI? 3. Assuming that MSI will be treated as a separate reporting subsidiary following the merger, develop the balance sheet for the subsidiary? 4. Calculate the Herfindahl Index for the industry both before and after the proposed merger