Sweet Cola Corporation (SCC) is bidding to take over Salty Dog Pretzels (SDP). SCC has 4,400 shares outstanding, selling at $50 per share. SDP has 2,000 shares outstanding, selling at $17.50 a share. SCC estimates the economic gain from the merger to be $27,000.

If SDP can be acquired for $20 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 $20 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 $50, so instead of paying $20 cash, SCC issues 0.40 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.