need a detailed solution of every step.

A. Following is given the premerger information about firm X (acquirer) and firm Y (target). Firm X Firm Y Firm Value $650 $250 Outstanding shares 1,200 400 Share price $25 $15 The post-merger synergetic value of firm XY is estimated to be $825. The firm Y, after negotiation, has agreed to undergo acquisition for $18 per share in cash. However, the firm Y has also negotiated in terms of stock exchange for a merger and agreed if firm X offers four of its shares for every one of Y's share. Assume that both firms have no debt outstanding. Required: 1. Compute the NPV of a merger on cash payment at $18 per share. 2. Compute the share price of firm XY and the merger premium. 3. Compute the NPV of a merger on stock payment. 4. Determine what payment mode suits shareholders of target firm i.e. cash or stock. 5. Determine the exchange ratio where the shareholders of target firm be indifferent between cash and stock payment. 6. Discuss in short theoretically why the stock offer becomes misleading to the shareholders of target firm. A. Following is given the premerger information about firm X (acquirer) and firm Y (target). Firm X Firm Y Firm Value $650 $250 Outstanding shares 1,200 400 Share price $25 $15 The post-merger synergetic value of firm XY is estimated to be $825. The firm Y, after negotiation, has agreed to undergo acquisition for $18 per share in cash. However, the firm Y has also negotiated in terms of stock exchange for a merger and agreed if firm X offers four of its shares for every one of Y's share. Assume that both firms have no debt outstanding. Required: 1. Compute the NPV of a merger on cash payment at $18 per share. 2. Compute the share price of firm XY and the merger premium. 3. Compute the NPV of a merger on stock payment. 4. Determine what payment mode suits shareholders of target firm i.e. cash or stock. 5. Determine the exchange ratio where the shareholders of target firm be indifferent between cash and stock payment. 6. Discuss in short theoretically why the stock offer becomes misleading to the shareholders of target firm