ABC Corp is trying to Acquire XYZ Corp through a stock swap offer. ABC currently has 250 million shares outstanding, a share price of $30, and outstanding debt of $2,000 million. XYZ currently has 150 million shares outstanding, a share price of $34, and outstanding debt of $800 million. Neither company has any excess cash. The synergies associated with the acquisition are $1,000 million. How should ABC Corp structure the offer in order for its shareholders to capture the full value of the synergies? Select the best answer. (Hint: you may use Excel's Goal Seek Function to help you with this - although that is not necessary)

I. ABC should offer 1.8 new shares of ABC for every share of XYZ.

II. ABC should offer 1 new share of ABC for every share of XYZ.

III. ABC should offer 1.36 new shares of ABC for every share of XYZ.

IV. ABC should offer 1.13 new shares of ABC for every share of XYZ.