XYZ Corporation is considering acquiring ABC Enterprises. XYZ$\text{'}$s management believes that by acquiring ABC, it can achieve synergies that will enhance shareholder value. Before making a final decision, XYZ$\text{'}$s management team conducts a thorough analysis of the proposed acquisition. a$.$ Discuss the potential strategic fit between XYZ Corporation and ABC Enterprises. What types of synergies $($market gains, cost reduction, etc.$)$ might XYZ realistically expect to achieve through this acquisition? Please name three of them and provide explanations. $(3$ marks$)$ b$.$ Assume ABC Enterprises has net income of $$5$ million, and comparable companies in the industry are valued at an average P$/$E ratio of $12.$ Estimate the value of ABC Enterprises based on this information. $(4$ marks$)$ c$.$ XYZ Corporation estimates that the acquisition will result in cost savings of $$2$ million per year indefinitely. If the cost of capital is $8\%,$ calculate the present value of these cost savings synergies. $(4$ marks$)$ d$.$ Prior to the acquisition, XYZ Corporation has $10$ million shares outstanding, with an EPS of $$3.$ Post$-$acquisition, assume XYZ issues an additional $2$ million shares to finance the acquisition. Calculate the new EPS if the net income of the combined entity is expected to increase by $$2$ million due to synergies. $(5$ marks$)$ e$.$ If XYZ Corporation values ABC Enterprises at $$60$ million based on its DCF analysis but ends up paying $$75$ million to complete the acquisition, calculate the acquisition premium. Discuss the reasons why companies might pay a premium over the intrinsic value in acquisitions. $(4$ marks$)$