Penn Corp. is considering the possible acquisition of the Teller Company. Both companies have no debt. Penn believes the acquisition will increase its total annual after-tax cash flows by $2 million indefinitely. Teller's current market value is $51 million and Penn's is $76 million. The appropriate discount rate for incremental cash flows is 10 percent. Penn is trying to decide whether it should offer 45 percent of its shares or $66 million in cash to Teller shareholders.

a.	What is the cost of each alternative?  (Enter your answer in dollars, not millions of dollars, )

cash cost	ps
cost of shares	ps

b.	What is the NPV of each alternative?  (Enter your answer in dollars, not millions of dollars.)

go cash	ps
NPV of shares	ps

C.

Which alternative should Penn choose?

	Money
	Stock