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Merger analysis - - buy or not? Assume earnings - before - tax of $ 4 0 0 million in 2 0 2 0 ,

Merger analysis -- buy or not?
Assume earnings-before-tax of $400 million in 2020,$440 million in 2021, and $484 in 2022. Constant growth thereafter at 6% per year. Cost of equity =14%. Market price of target company is $42.60/share. You're willing to bid a maximum of 10% over market price. Tax rate =21%; annual depreciation =$80 million, with anticipated reinvestment at 75% of depreciation. Assume 90 million shares outstanding.
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