the stock alternative? at is the merger's NPV under the stock offer? tock versus Cash Offers. As financial manager of Britwell Inc., you are investig Home. You have the basic data given in the following table. You estimate Os expect a steady growth of about 6% in Salome's earnings and dividends. Under w management, this growth rate would be increased to 8% per year without the need for addi- tional capital. (LO21-2) sible acquisition of Salome. that investors expect a steady growth o Salome Forecast earnings per share Forecast dividend per share Number of shares Stock price Britwell $5.00 $3.00 1,000,000 $90 $1.50 $0.80 600,000 $20 a. What is the gain from the acquisition? b. What is the cost of the acquisition if Britwell pays $25 in cash for each share of Salome? c. What is the cost of the acquisition if Britwell offers one share of Britwell for every three shares of Salome? d. How would the cost of the cash offer change if the expected growth rate of Salome was not changed by the merger? e. How would the cost of the share offer change if the expected growth rate was not changed by the merger