Question: e. 7.9796 12. Gekko Properties is considering purchasing Teldar Properties. Gekko's analysts project that the merger will result in incremental after-tax cash flows of $2

e. 7.9796 12. Gekko Properties is considering purchasing Teldar Properties. Gekko's

e. 7.9796 12. Gekko Properties is considering purchasing Teldar Properties. Gekko's analysts project that the merger will result in incremental after-tax cash flows of $2 million, $4 million, $5 million, and $10 million over the next four years. The horizon value of the firm's operations, as of Year 4, is expected to be $108 million. Assume all cash flows occur at the of the year. The acquisition would be made immediately, if it is undertaken. Teldar's post-merger beta is estimated to 2.0, and its post-merger tax rate would be 35.00%. The risk-free rate is 6.00%, and the market risk premium is 5.70% What is the value of Teldar to Gekko Properties? Do not round intermediate calculations. a. $78,888,332 b. $69,812,683 c. $76,793,952 d. $82,378,966 e. $56,548,273

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