Question 2 a) Briefly explain two arguments for and two against the privatisation of public assets. b) X-Coper Limited announced a bid to take over Nickel Pty Limited. X-Coper Pty Limited has 3 million shares outstanding, selling at $15 per share. Nickel Pty Limited has 2 million shares outstanding, selling at $7.50 per share. X-Coper Limited estimated the potential economic gain form the merger to be $5,000,000. 1. il. iil. iv. If Nickel Pty Ltd could be acquired for $9 per share, what is the NPV of the Merger to X-Coper Limited? What will X-Coper Limited shares sell for when the market learns that it plans to acquire Nickel Pty Ltd for $9 per share? What will Nickel Pty Ltd shares sell for? What are the percentage gains to the shareholders of each firm? If instead of a cash payment X-Coper Limited acquired Nickel Pty Ltd through a share exchange what would be percentage gains if: for each share in the Nickel Pty Ltd shareholders receive 0.6 of one share in X-Coper Limited. What will be the price per share of the merged firm? What is the NPV of the merger to X-Coper Limited when it uses an exchange of shares? If your answer differs explain why this is so. c) Discuss the role of an underwriter in an equity capital raising