Q8 to Q16 are based on the following information: You are leading a team on a M&A deal. Suddenly your analyst has disappeared and you have the following unfinished spreadsheet. The acquirer and the target are assumed to have zero growth. Tax rate is 40%. Now it is up to you to finish this job. Acquirer Target Combined Sales 400 100 500 200 60 260 Operating Expenses Annual cost savings EBIT 20 200 40 ?1? EBIT(1 - t) 120 24 ??? Depreciation 40 30 ??? 30 30 ??? Gross Plant & Equipment 10 5 ??? Change in Working Capital 120 19 ?2? Free Cash Flow to Firm Discount rate 8.0096 996 896 Firm Value 1500 211.111 ?3? 400 50 Long term debt 450 Equity value 1100 161.111 74? 8. Please fill in the numbers. What is ?1? ? 15 QUESTION 9 9. What is ?2? 8 QUESTION 10 10. What is ?3? 450 QUESTION 11 11. What is ?4? 1437.50 QUESTION 12 12. What is the synergy of this merger? QUESTION 13 13. What is minimum price to offer? QUESTION 14 14. Suppose you decide to share 30% of the synergy to the target shareholders, what is your initial offer? QUESTION 15 15. What is the maximum price you can offer? QUESTION 16 16. If the tax rate drops from 40% to 22% and everyting else stays the same, the synergy from this merger will increase. True False