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Question 36 to 40 use the following set-up! Suppose that the Big Company has made an offer for the Little Company that consists of the purchase of 1 million shares at $20 per share. The value of Little Company stock before the bid was made public was $12 per share. Big Company stock is trading at $35 per share, and there are 10 million shares outstanding. Big Company estimates that it is likely 8 to reduce costs through economics of scale with this merge of $5 million per year, forever. The appropriate discount rate for these gains is 10%. 36. What are the synergistic gains from this merger? A. 20 million B. 50 million C. 40 million D. 34 million E. 22 million 37. What is the target shareholder's gain? A. 4 million B. 8 million C. 2 million D. 6 million E. 5 million 38. What is Acquirer's gain? A. 42 million B. 36 million C.37 million D. 39 million E. 20 million 39. What do Big shareholders get? A. 25% of the gain B. 75% of the gain C. 15% of the gain D. 84% of the gain E. 90% of the gain 40. What is the value of Big Company post-merge? A. 300 million 1 B. 350 million C. 392 million D. 386 million