Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm T)

Finance Aug 15, 2020

Consider the following pre-merger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding.
Firm B Firm T Shares outstanding 1,700 1,100 Price per share $36 $27
Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $3,400.
If Firm T is willing to be acquired for $28 per share in cash, what is the NPV of the merger?

If Firm T is willing to be acquired for $28 per share in cash, what will the price per share of the merged firm be?

If Firm T is willing to be acquired for $28 per share in cash, what is the merger premium?

Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers three of its shares for every 4 of T's shares, what will the price per share of the merged firm be?

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