You are leading a team on a M&A deal. Suddenly your analyst has disappeared and you have the following unfinished spreadsheet. The acquirer and the target are assumed to have zero growth. Now it is up to you to finish this job. You also believe that the tax rate will be 20% when this merger closes, so you are using 20% as the corporate tax rate in this calculation. Acquirer Target Combined Sales 500 120 620 200 60 Operating Expenses Annual cost savings 260 30 EBIT 300 60 ?1? EBIT(1 - 1) 240 48 ??? 40 20 ??? 30 40 ??? Depreciation Gross Plant & Equipment Change in Working Capital Free Cash Flow to Firm 10 un ??? 240 23 ?2? Discount rate 8.0096 996 896 Discount rate 8.00% 9% 8% Firm Value 3000 255.56 ??? 1200 100 1300 Long term debt Equity value 1800 155.56 ?3? 21? is ?2? is 737 is The synergy of this merger is The maximum offer you can make is