$($b$)$ Idaman Saga Bhd$.$ is considering making an offer to purchase QSR Brand Bhd$.$

Use the following information to help in the valuation of the two companies:

Idaman Saga Bhd$.$ also knows that securities analysts expect the earnings and

dividends of QSR Brand Bhd$.$ to grow at a constant rate of $4\%$ each year. Idaman

Saga Bhd$.$ management believes that the acquisition of QSR Brand Bhd$.$ will provide

the firm with some economics of scale that will increase this growth rate to $6\%$ per

year. With the new growth rate, the price per share for QSR Brand Bhd$.$ will be

RM$9\mathrm{.}80.$ Answer the following questions:

$($i$)$ What is the value of QSR Brand Bhd$.$ to Idaman Saga Bhd$.?$

$(2$ marks$)$

$($ii$)$ What would Idaman Saga Bhd$\text{'}$s gain be from this acquisition?

$(2$ marks$)$

$($iii$)$ What is the NPV of the acquisition if Idaman Saga Bhd$.$ were to offer RM$8\mathrm{.}20$

in cash for each share of QSR Brand Bhd$?$

$(2$ marks$)$

$($iv$)$ What is the most Idaman Saga Bhd$.$ should be willing to pay for the stock of

QSR Brand Bhd$.?$

$(2$ marks$)$

$($v$)$ What is the NPV if Idaman Saga Bhd$.$ were to offer $500,000$ of its shares in

exchange for the outstanding stock of QSR Brand Bhd$?$

$(4$ marks$)$

$($vi$)$ Should the acquisition be attempted? If yes, should it be as in $($iii$)$ or $($v$)?$

$(2$ marks$)$