Tom Corporation is considering the acquisition of Jerry Corporation. Jerry Corporation has free cash flows to debt and equity holders of $$3,750,000.$ If Tom Corporations acquires Jerry Corporation, Jerry will reduce operating costs by $$1,500,000.$ This will increase free cash flow to $$4,900,000.$ Assume that cash flows occur at year$-$end and the weighted average cost of capital is $9\mathrm{.}8\%.$

What is the value of Jerry Corporation without a merger?

What is the value of Jerry Corporation with the merger?