Thefollowing are the details of two potential merger candidates Northrop and Gru

Thefollowing are the
details of two potential merger candidates Northrop and Grumman in 1993NorthropGrummanRevenues$4400.00$3125.00Cost of Goods Sold (w/o
Depreciation)87.50%89.00%Depreciation$200.00$74.00Tax Rate35.00%35.00%Working Capital10% of Revenue10% of RevenueMarket Value of Equity$2000.00$1300.00Outstanding Debt$160.00$250.00Both firms are expected to grow 5% a year in perpetuity.
Capital spending is expected to be offset by depreciation. The beta for both
firms is 1 and both firms are rated BBB with an interest rate on their debt of
8.5% (the treasury bond rate is 7%).As a result of the merger the combined firm is expected
to have a cost of goods sold of only 86% of total revenues. The combined firm
does not plan to borrow additional debt.a. Estimate the value of Grumman operating
independently.b. Estimate the value of Northrop operating
independently.c. Estimate the value of the combined firm with no
synergy.d. Estimate the value of the combined firm with synergy.e. How much is the operating synergy worth?