Large Co, an all-equity firm with 200 million shares outstanding and $1,000 million of equity, wants to buy Target Co. Target Co. is an all-equity $100 million firm with 2 million shares outstanding. Together they will generate synergy values of $100 million. After negotiations, Large Co. and Target Co. agree to allocate the synergy value equally. Large Co. will compensate Target Co. shareholders with 50% cash and 50% shares. a) Assuming efficient markets, calculate the expected share price of both the target and the acquirer after announcement. b) Assuming efficient markets, and based on your answer in a), prepare the market value balance sheet after acquisition is complete. Provide the details. c) Based on your answer in a) calculate the number of Large Co shares that Target Co shareholders will receive in exchange for their Target Co shares. d) Assume the market values this merger differently than the firms value this merger. Upon announcement the shares of both Large Co. and Target Co. increased. Large Co. increased 3% and Target Co. increased 20%. Using the share price information, describe how the market views the merger. Based on the market reaction, did the acquirer or the target get the most value? Large Co, an all-equity firm with 200 million shares outstanding and $1,000 million of equity, wants to buy Target Co. Target Co. is an all-equity $100 million firm with 2 million shares outstanding. Together they will generate synergy values of $100 million. After negotiations, Large Co. and Target Co. agree to allocate the synergy value equally. Large Co. will compensate Target Co. shareholders with 50% cash and 50% shares. a) Assuming efficient markets, calculate the expected share price of both the target and the acquirer after announcement. b) Assuming efficient markets, and based on your answer in a), prepare the market value balance sheet after acquisition is complete. Provide the details. c) Based on your answer in a) calculate the number of Large Co shares that Target Co shareholders will receive in exchange for their Target Co shares. d) Assume the market values this merger differently than the firms value this merger. Upon announcement the shares of both Large Co. and Target Co. increased. Large Co. increased 3% and Target Co. increased 20%. Using the share price information, describe how the market views the merger. Based on the market reaction, did the acquirer or the target get the most value