Samsung investigated the possible merger betweeb itself and LG. Both companies are large. Some relevant info:

Samsung: Current share price: R50 Shares outstanding: 100, EPS: US$3.5, Req return 7%

LG : Current share price: R40 Shares outstanding: 100, EPS: US$2.8, Req return 7%

The offer was to pay LG shareholders R4500. In the form of R2 500 cash and the remaining amount in form of Samsung stock.

Initial forecasts have indicated that the EPS of the 2 companies after the merger will increase with R0.7 as result of the synergy.

Calculate the NPV of the proposed merger if Samsung were to purchase using R2500 cash and R 2000 in form of shares.