Question 4. Artists Supplies Ltd (ASL) has 1 million shares outstanding which currently trade at a price of $10. It has made a takeover offer to the shareholders of Tally Ltd. Tally Ltd has 1 million shares outstanding with a current price per share of $2.50. Assume that the takeover will occur with certainty and the market knows this. Further, there are expected synergies of $800,000 expected from the merger. a) ASL decides to make a stock offer with an exchange ratio of 0.40. Calculate the price of ASLs shares immediately after it makes the takeover announcement. (4 marks) b) Calculate the value of the offer to Tally Ltds shareholders. (4 marks) c) Calculate the merger NPV, showing separately the synergies and the acquisition premium. (2 marks)