Cost of merger, Benefit of Merger, Cost to acquirer, NPV to acquiree - based on cash Consideration.

Consider the following financial data of A ltd and T Ltd just before the merger announcement of the latter by the former:

Particulars A Ltd T Ltd
Market price per share ` 150 ` 30
Number of shares (in lakh) 10 6
Market value (MV) of the firm (in ` lakh) 1,500 180

(i) If A Ltd intends to pay ` 240 lakh in cash to T Ltd, find
a. Cost of Merger.
b. True Cost of Merger
c. Cost to A Ltd.
d. NPV to T Ltd.

(ii) If A Ltd intends to offer its 1,60,000 shares in exchange of shares of T Ltd. Assume further, the merger is expected to generate cost savings with present value of ` 94.80 lakh. It is expected that these cost savings would push up the market price.
Find
a. Benefit of Merger
b. Cost of Merger.
c. True Cost of Merger.
d. Cost to A Ltd.
e. NPV to T Ltd.
f. NPV to A Ltd.