When a merger takes place between two companies to form a single firm, the target company to operate as a separate identity Consider the following scenario: Western Gas & Electric Co. (WG&E) is considering an acquisition of Thatherton Fuels., and estimates that acquiring Thatherton will result in incremental after-tax net cash flows in years 1-3 of $8.0 million, 12.0 million, and $14.4 million, respectively After the first three years, the incremental cash flows contributed by the Thatherton acquisition are expected to grow at a constant rate of 5% per year. WG&E's current beta is 0.40, but its post-merger beta is expected to be 0.52. The risk-free rate is 3.5%, and the market risk premium is 5.60%. Based on this information, complete the following table by selecting the appropriate values: Value Post-merger cost of equity Projected value of the cash flows at the end of three years The value of Thatherton Fuels' contribution to Western Gas & Electric Co (WG&E) $1196.08 million $736.05 million $920.06 million $1104.07 million Thatherton Fuels has 3 million shares of common stock outstanding. What is the largest tender offer Western Gas & Electric Co. (WG&E) should make on each of Thatherton Fuels' shares? O $368.03 O $306.69 o $245.35 $368.02