The shareholders of a target firm $($Ta$)$ have voted in favor of a buyout offer from an acquiring firm. Information about each firm is given in the following table. The shareholders of

Ta will receive $1$ share of stock in the merged firm for every three shares they hold in the target firm.

a$.$ What will EPS of Bi be after the merger? What will the P$/$E ratio be if the NPV of the acquisition is zero? Enter your answer in the box shown below as a number with $2$

digits to the right of the decimal point. Your Answer: Answer

b$.$ What must Bi think is the value of the synergy between these two firms? Explain how your answer can be reconcile with the decision to go ahead with the takeover