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Consider the following premerger information about a

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Consider the following premerger information about a

 

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding.

 

Firm B Firm T
  Shares outstanding 5,600 2,200
  Price per share $ 45 $ 19

 

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $9,300. Firm T can be acquired for $21 per share in cash or by exchange of stock wherein B offers one of its shares for every two of T‘s shares.
At what exchange ratio of B shares to T shares would the shareholders in T be indifferent between the two offers?

 

 

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Consider the following premerger information about a

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Consider the following premerger information about a

 

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