Some help and explanation will be great

Question 10 12 points Save Answer (12 points) Suppose that 3M has just made an offer to acquire IBM. Prior to the offer, IBM had 35 million shares outstanding that traded at a price of $33 per share, and 3M had 55 million shares outstanding that traded at $49 per share. Assume that prior to the offer, the stock market did not anticipate an acquisition of IBM by 3M. The projections for how synergies would affect the combined firm's expected unlevered FCFs over the next three years are those given below. You should assume that these synergy FCFs are expected to grow at 1% per year after 2021, that FCFs listed in the table below are incurred at the end of each year, and that date 0 is the beginning of 2019. The appropriate ra to use in valuing the incremental FCFs from these synergies is 10%. The risk- free rate is 3%. The proposed merger will not affect the riskiness of either company's existing debt. Assume throughout that the two companies do not expect any other mergers or acquisitions (both firms would remain stand-alone firms forever if this proposed merger did not take place). Use this information to answer the below questions, and where appropriate, please express all answers in millions of dollars. 2019 2020 2021 Change in expected FCFs (in millions) from synergies 70 75 80 Be sure to answer all of the parts of the question and clearly label your answer for each part. For example, begin your answer to part A with 'Part A: A. (6 points) What is the combined equity value of the merged firm, if 3M uses stock to complete the transaction today (date 0)? B. (6 points) Suppose that 3M offers to pay 0.8 shares of 3M for each share of IBM. What is the total gain or loss for IBM shareholders from this deal? 2012 ABC