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Question 12 - Gazetier is considering making an offer to purchase from Publiciste. Its chief financial officer gathered the following information: Gazetier's management is also

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Question 12 - Gazetier is considering making an offer to purchase from Publiciste. Its chief financial officer gathered the following information: Gazetier's management is also aware that financial analysts expect Publiciste's earnings and dividends (currently $1.75 per share) to grow at a constant rate of 3% each year. She believes that the acquisition of Publiciste will allow her company to achieve economies of scale that will increase this growth rate to 5% per year. a) What is the value of the Publiciste company for Gazetier? b) What would Gazetier gain from this acquisition? c) If Gazetier offered $30 in cash for each Publiciste share, what would be the NPV of the acquisition? d) What is the highest amount that Gazetier should agree to pay in cash for each action of Publicist? e) If Gazetier offered 250,000 of its shares in exchange for the outstanding shares of Publiciste, what would be the NPV of this transaction? Question 12 - Gazetier is considering making an offer to purchase from Publiciste. Its chief financial officer gathered the following information: Gazetier's management is also aware that financial analysts expect Publiciste's earnings and dividends (currently $1.75 per share) to grow at a constant rate of 3% each year. She believes that the acquisition of Publiciste will allow her company to achieve economies of scale that will increase this growth rate to 5% per year. a) What is the value of the Publiciste company for Gazetier? b) What would Gazetier gain from this acquisition? c) If Gazetier offered $30 in cash for each Publiciste share, what would be the NPV of the acquisition? d) What is the highest amount that Gazetier should agree to pay in cash for each action of Publicist? e) If Gazetier offered 250,000 of its shares in exchange for the outstanding shares of Publiciste, what would be the NPV of this transaction

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