The Hollings Corporation is considering a two$-$step buyout of the Norton Corporation. The latter firm has $2\mathrm{.}2$ million shares outstanding and its stock price is currently $$40$ per share. In the two$-$step buyout, Hollings will offer to buy $51$ percent of Norton$$s shares outstanding for $$59$ per share in cash and the balance in a second offer of $810,000$ convertible preferred stock shares. Each share of preferred stock would be valued at $40$ percent over the current value of Norton$$s common stock. Mr$.$ Green, a newcomer to the management team at Hollings, suggests that only one offer for all Norton$$s shares be made at $$56\mathrm{.}25$ per share.

a$.$ Calculate the total costs of the two alternatives. $($Do not round intermediate calculations. Enter your answers in dollars, not millions $($e$.$g$.,$ $$123,456,000).)$

b$.$ Which is better in terms of minimizing costs?

multiple choice

Two step offer

Single offer