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Pls ans Ridgetown News Inc. is considering making an offer to purchase Orford Publications. The vice president of finance has collected the following information: Price-earnings

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Ridgetown News Inc. is considering making an offer to purchase Orford Publications. The vice president of finance has collected the following information: Price-earnings ratio Shares outstanding Earnings Dividends Ridgetown 14.5 1,300,000 $3,900,000 $ 950,000 Orford 9.2. 175,000 $640,000 $310,000 Ridgetown also knows that securities analysts expect the earnings and dividends of Orford to grow at a constant rate of 5% each year. Ridgetown management believes that the acquisition of Orford will provide the firm with some economies of scale that will increase this growth rate to 7% per year. a. What is the value of Orford to Ridgetown? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Value of report $ b. What would Ridgetown's gain be from this acquisition? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Gain $ c. If Ridgetown were to offer $38 in cash for each share of Orford, what would the NPV of the acquisition be? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response. Negative answers should be indicated by a minus sign.) NPV d. What's the most Ridgetown should be willing to pay in cash per share for the stock of Orford? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Maximum share price

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