Valuation of a Merger You own stock in Blush, Inc., which has just made a bid of $30 million to purchase ABC Corporation. ABC Corporation currently has total cash flows of $2.5 million that are expected to grow indefinitely by 2 percent annually. Managers estimated that, because of synergies, the merged firms cash flows will increase by $500,000 in the first year after the merger and that these cash flows will grow by an additional 4 percent in years 2 through 5 following the merger. After the first five years, these incremental cash flows will grow at a rate of 2 percent annually. The merged firms are expected to have a beta = 1.2, the risk free rate is 4.5 percent, and the market risk premium is currently 5.5 percent. Calculate the NPV of the merger. Will you vote in favor the merger? Explain and substantiate your response.