Velcro Saddles is contemplating the acquisition of Skiers' Airbags Inc. The values of the two companies as separate entities are $42 million and $21 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $610,000 per year in perpetuity. Velcro Saddles considers offering Skiers' shareholders a 50% holding in Velcro Saddles. The opportunity cost of capital is 10%.

a.What is the value of the stock in the merged company held by the original Skiers' shareholders?(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

b.What is the cost of the stock alternative?(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

c.What is the merger's NPV under the stock offer?(A negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)