ABC has 1 million shares outstanding, each of which has a price of $22. It has made a takeover offer of XYZ Corporation which has 1 milion shares outstanding, and a price per share of 241. Assume that the above will occur with certainty and wil market participants know this. Furthermore, there are no synergies to merging the two forms a. Assume ABC made a cash offer to purchase XYZ for $37 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 rate of 0.14 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 others are offers to purchase XYZ for $37 million Does that mean that your answers to parts (a) and (b) must be identical baplan