Sprint is planning on acquiring Nextel. The situation for both firms before the transaction is as outlined below:

Sprint before the transaction:

• 1,400 million shares outstanding at a market price of $25 per share
• Market value of debt is $5,000 million
• No excess cash

Nextel before the transaction:

• 1,030 million shares outstanding at a market price of $30 per share
• Market value of debt is $5,000 million
• No excess cash

Transaction details:

• Sprint will pay $2 per share of Nextel and will also exchange each share of Nextel for 1.1661 shares of Sprint
• Sprint will finance the cash component of the offer by taking on an acquisition loan
• Sprint will assume the outstanding debt of Nextel
• Synergies from the acquisition will be $12,000 million (including any tax shields from the acquisition loan)

1. What is the enterprise value of Sprint after its acquisition of Nextel (₊)?
2. What is the market value of equity of Sprint after its acquisition of Nextel (₊)?
3. What is the share price of Sprint after its acquisition of Nextel (₊)?
4. What is the Price Paid by Sprint for the acquisition of Nextel?
5. How much value did Sprint create for its shareholders through the acquisition?