ABC has $1\mathrm{.}00$ million shares outstanding, each of which has a price of $$19.$ It has made a takeover offer of

XYZ Corporation, which has $1\mathrm{.}00$ million shares outstanding, and a price per share of $$2\mathrm{.}53.$ Assume that the takeover

will occur with certainty and all market participants know this. Furthermore, there are no synergies to merging the two

firms.

a$.$ Assume ABC made a cash offer to purchase $xYZ$ for $$3\mathrm{.}18$ million. What happens to the price of ABC and $xYZ$ on

the announcement? What premium over the current market price does this offer represent?

b$.$ Assume ABC makes a stock offer with an exchange ratio of $0\mathrm{.}14.$ What happens to the price of ABC and $xYZ$

this time? What premium over the current market price does this offer represent?

c$.$ At current market prices, both offers are offers to purchase XYZ for $$3\mathrm{.}18$ million. Does that mean that your answers

to parts $($a$)$ and $($b$)$ must be identical? Explain.

a$.$ After ABC makes a cash offer to purchase $xYZ$ for $$3\mathrm{.}18$ million, the pri$*******$PLEASE ANSWER A$,$B$,$C $*******$