Penn Corp. is analyzing the possible acquisition of Teller Company. Both firms have no debt. Penn believes the acquisition will increase its total aftertax annual cash flows by $3 million indefinitely. The current market value of Teller is $51 million, and that of Penn is $89 million. The appropriate discount rate for the incremental cash flows is 10 percent. Penn is trying to decide whether it should offer 45 percent of its stock or $77 million in cash to Teller's shareholders.

a. What is the cost of each alternative? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)   

Cash cost $   

Equity cost $

b. What is the NPV of each alternative? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)   

NPV cash $   

NPV stock $