As financial manager of Corton Inc., you are investigating a possible acquisition of Denham. You have the basic data given in the following table. You estimate that investors expect a steady growth of about 6% in Denham's earnings and dividends. Under new management, this growth rate would be increased to 8% per year without the need for additional capital. <image 1> How would the cost of the share offer change if the expected growth rate was not changed by the merger?
['the cost of merger through stocks offer is $3,000,000', 'the cost of merger through stocks offer is $4,000,000', 'the cost of merger through stocks offer is $4,500,000', 'the cost of merger through stocks offer is $5,000,000']