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Sweet Cola Corporation ( SCC ) is bidding to take over Salty Dog Pretzels ( SDP ) . SCC has 2 , 0 0 0

Sweet Cola Corporation (SCC) is bidding to take over Salty Dog Pretzels (SDP). SCC has 2,000 shares outstanding, selling at $30 per share. SDP has 1,000 shares outstanding, selling at $15.50 a share. SCC estimates the economic gain from the merger to be $10,000.
If SDP can be acquired for $18 a share, what is the NPV of the merger to SCC?
What will SCC sell for, per-share, when the market learns that it plans to acquire SDP for $18 a share?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
What will SDP sell for, per share, if the market learns about the acquisition?
What are the percentage gains to the shareholders of each firm?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Now suppose that the merger takes place through an exchange of stock. On the basis of the premerger prices of the firms, SCC sells for $30, so instead of paying $18 cash, SCC issues 0.60 of its shares for every SDP share acquired. What will be the price of the merged firm?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
What is the NPV of the merger to SCC when it uses an exchange of stock?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. NPV
b. Selling price per share
c. Selling price per share
d. SCC %
d. SDP %
e. Price per share
f. NPV

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