****THIS IS A TWO PART QUESTION AND DOES NOT GO AGINST CHEGG RULES TO ANSWER BOTH. IF YOU CAN NOT ANSWER ALL CORRECTLY PLEASE LEAVE THE QUESTION FOR ANOTHER EXPERT. THX IN ADVANCE!****Tyler Processings current stock price is $19.60 per share. Tyler is 100% equity financed and has been targeted by several potential acquirers. One of these suitors, Gellar Manufacturing, has conducted analysis to determine Tylers value to Gellar if it were acquired.

Tylers current price/earnings (P/E) ratio is 14, but Gellar is confident that under its management Tyler's P/E would be 16.8. Tyler is expected to generate $40 million of operating income (EBIT) this year and has 20 million shares of stock outstanding. Both firms have a tax rate of 30%. How much per share is Tylers stock worth if Gellar acquires the company? (Note: Round intermediate calculations to two decimal places.)

$23.52 per share

$39.20 per share

$25.87 per share

$19.60 per share

How much synergy is this merger expected to generate?

$4.70 per share

$3.14 per share

$3.92 per share

$5.88 per share