QUESTION C2 Macro PLC current has 1 million shares outstanding, with a market value of £30 per share. Macro is expected to pay a dividend of £3 per share next year and the dividends are expected to...

Extracted text: QUESTION C2 Macro PLC current has 1 million shares outstanding, with a market value of £30 per share. Macro is expected to pay a dividend of £3 per share next year and the dividends are expected to grow constantly at 5% a year. Macro PLC is approaching Micro PLC for a potential acquisition. Macro is making an offer to acquire the whole of Micro's 500 thousand shares, which are currently valued at £4 on the market. Micro PLC is expected to pay a dividend of £1 per share in a year's time and the dividends are expected to grow at 4% for a foreseeable future. The expectation is that if the acquisition is successful, the merged company will be able to deliver a better dividend growth rate of 8%. Required: a. Estimate the gain of the acquisition if it goes ahead. b. How much is the cost of the acquisition under the current £6 cash payment offer? c. Critically discuss at least three sensible motives for mergers and acquisitions.