1. What is the incremental value to shareholders projected in this merger?

1.

What is the incremental value to shareholders projected in this merger? (Assume the restructuring cost is $330 million in year 1 $50 million in year 2 and
$20 million in year 3. Synergy savings are $125 million in year 1 $250 million in year 2 $350 million in year 3 and $350 million in year 4 and it will grow
at 3% per year forever after year 4. The corporate tax rate is 40% and the discount rate is 11%.)

2.

How will this value of synergies be shared between the two merging firms in the proposed transaction?

3. Given that options on average are worth about 31% of the underlying value of the stock on the date of grant how much of incremental value created in this
transaction will go to the CEOs of the two firms involved?