Question 2 (20 marks) a) Western has a market value of $950 with 50 shares outstanding and a price per share of $19. Eastern has a market value of $3,000 with 120 shares outstanding and a price per share of $25. Eastern is acquiring Western by exchanging 40 of its shares for all 50 of Western's shares. What is the cost of the merger to Eastern's stockholders if the merger creates $200 of synergy? (10 marks) b) Firm K is planning on merging with Firm L. Firm K currently has 5,500 shares of stock outstanding at a market price of $28 a share. Firm L has 500 shares outstanding at a price of $16 a share. The merger will create $600 of synergy. Firm K plans to offer a sufficient number of its shares to acquire Firm L at an acquisition cost of $8,200. How many total shares will be outstanding in the merged firm? (10 marks)