The Chocolate Ice Cream Company and the Vanilla Ice Cream Company have agreed to merge and form Fudge Swirl Consolidated. Both companies are exactly alike except that they are located in different towns. The end

$-$

of

$-$

period value of each firm is determined by the weather, as shown below. There will be no synergy to the merger.

$$

State Probability Value

$$ Rainy

$.$

$3$

$$$

$4$

$4$

$0$

$,$

$0$

$0$

$0$

$$

$$ Warm

$.$

$2$

$6$

$2$

$0$

$,$

$0$

$0$

$0$

$$

$$ Hot

$.$

$5$

$1$

$,$

$1$

$6$

$0$

$,$

$0$

$0$

$0$

$$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$\_$

$$

The weather conditions in each town are independent of those in the other. Furthermore, each company has an outstanding debt claim of $

$6$

$2$

$0$

$,$

$0$

$0$

$0$

$.$

$$Assume that no premiums are paid in the merger.

$$

a

$.$

$$What are the possible values of the combined company?

$($

Do not round intermediate calculations and round your answers to the nearest whole number, e

$.$

g

$.$

$,$

$3$

$2$

$.$

$)$

$$

$$

b

$.$

$$What are the possible values of end

$-$

of

$-$

period debt and stock after the merger?

$($

Leave no cells blank

$-$

$$be certain to enter

$"$

$0$

$"$

$$wherever required. Do not round intermediate calculations and round your answers to the nearest whole number, e

$.$

g

$.$

$,$

$3$

$2$

$.$

$)$

$$

$$

c

$.$

$$How much do stockholders and bondholders each gain or lose if the merger is undertaken?

$($

A loss should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e

$.$

g

$.$

$,$

$3$

$2$

$.$

$)$

The Chocolate lce Cream Company and the Vanlla lice Cream Company have apreed in merpe and form Fudpe Swirl

Consolidated. Both companies are exactly alke expept thot they are located in different towns. The end

$-$

of

$-$

period value of each firm

is determined by the weather, as shown below. There will be no synergy to the merger.

The weather conditions in each town are independent of those in the other. Furthermore, esch company has an outstanding debt

claim of $

$6$

$2$

$0$

$,$

$0$

$0$

$0$

$.$

$$Assume that no premiums are pald in the merger.

What are the possible values of the combined company?

$($

Do not roubd intermediate calculations and round your answers

to the bearest whole number, e

$.$

g

$.$

$3$

$2$

$.$

$)$

What are the possible values of end

$-$

of

$-$

period debt and slock after the merger?

$($

Leave no cells blank

$-$

$$be certali to enter

$"$

$0$

$"$

wherever required. Do not rousd intermediate calculations and round your answers to the nearest whele bamber,

$$

$0$

$$g

$.$

$,$

$3$

$2$

$.$

$)$

b

$.$

c

$.$

How much da stockholders and bondholders each gain or lose if the merger is undertaken?

$($

A loss shoeld be indicated by a

mines sign. Do not round intermediate calculations and reand your alsowers to the nearest whole nember, eqf,

$3$

$2$

$.$

$]$The Chocolate lce Cream Company and the Vanlla lice Cream Company have egreed io merpe and form Fudpe Swirl

Consolidated. Both companies are exoctly al ke exoept that they are located in dfferent towns. The end$-$of$-$period value of each firm

is determined by the weather, as shown below. There will be no synergy to the merger.

The weather conditions in each town are independent of those in the other. Furthermore, each company has an outsianding debt

claim of $$620,000.$ Assume that no premiums are pald in the merger.

What are the possible values of the combined company? $($Do not roubd intermediate calculations and round your answers

a$.$

to the nearest whole number, e$.-8.32.)$

What are the possible values of end$-$of$-$period debt and slock after the merger? $($Leave no cells blamk $-$ be certain to enter $"0"$

wherever required. Do not rousd intermediate calculations and round your answers to the nearest whele namber, $.$

$32.)$

b$.$

c$.$

How much do stockholders and bondholders each gain or lose if the merger is undertaken? $($A loss should be indicated by a

mines sign. Do not round intermediate calculations and reand your absowers to the nearest whole namber, eqf, $32.)$

Bondholder gain$/$loss

Stockholder gain$/$loss