Velcro Saddles is contemplating the acquisition of Skiers Airbags Incorporated The values of the two companies as separate entities are $38 million and $19 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $590,000 per year in perpetuity. Velcro Saddles considers offering Skiers shareholders a 50% holding in Velcro Saddles. The opportunity cost of capital is 10%.

What is the value of the stock in the merged company held by the original Skiers shareholders?

Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.

What is the cost of the stock alternative?

Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.

What is the mergers NPV under the stock offer?

Note: 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.