When an acquirer assesses a potential target, the price the acquirer is willing to pay should be based on the value of: The target firm's equity The target firm's total corporate value (debt and equity) The target firm's debt Consider the following scenario: Sato Chemicals Inc. is considering an acquisition of Tull Industries., and estimates that acquiring Tull will result in incremental after-tax net cash flows in years 1-3 of $15.0 million, $22.5 million, and $27.0 million, respectively. After the first three years, the incremental cash flows contributed by the Tull acquisition are expected to grow at a constant rate of 3% per year. Sato's current beta is 1.20, but its post-merger beta is expected to be 1.56. The risk-free rate is 4%, and the market risk premium is 6.10%. Based on this information, complete the following table by selecting the appropriate values: Based on this information, complete the following table by selecting the appropriate values: Value Post-merger cost of equity Continuing value in year 3 The value of Tull Industries' contribution to Sato Chemicals Inc. 11.05% 10.90% 11.32% 13.52% Value Post-merger cost of equity Continuing value in year 3 The value of Tull Industries' contribution to Sato Chemicals Inc. $927.00 million $241.41 million $256.65 million $264.35 million Value Post-merger cost of equity Continuing value in year 3 The value of Tull Industries' contribution to Sato Chemicals Inc. $298.78 million $229.83 million $183.86 million $275.80 million Tull Industries has 3 million shares of common stock outstanding. What is the largest Jals Tull Industries has 3 million shares of common stock outstanding. What is the largest tender offer Sato Chemicals Inc. should make on each of Tull Industries' shares? $61.29 $91.93 $76.61