Simco Corp is a manufacturing firm with a currently market capitalization of $ 250 million with 100 million shares outstanding. The firm has an annual cash flow earnings of $30 million and its cost of capital is 12%. Simco Corp is considering taking over Abacus Corp which currently has 10 million shares outstanding with a market capitalization of $ 15 million and annual cash flow earnings of $15 million. The cost of capital for Abacus Corp is 10%. The takeover is expected to result in annual additional cash flow of $ 0.6 million in the first year, which are expected to remain constant in perpetuity. The cost of capital for synergies is 12%. Simco Corp is considering two different options to finance the take over () a cash offer with a 25% premium relative to its market price (ii) a share swap of 3 shares of Simco Corp for every 4 shares of Abacus Corp (6 marks). a. Calculate (1) overall gain (i) gain to Simco shareholders and (iii) gain to Abacus shareholders if the cash offer is made (2.5 marks). b. Calculate () gain to Simco shareholders and (ii) gain to Abacus shareholders if the share-swap offer is made (2.5 marks) c. At what cash offer price (cash offer) would this be a zero NPV investment for Simco Corp? (1 mark)