ABC has $1$ million shares outstanding, each of which has a price of $$24.$ It has made a takeover offer of $xYZ$ Corporation which has $1$

million shares outstanding, and a price per share of $$2\mathrm{.}57.$ 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{.}3$ 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 $0\mathrm{.}1375.$ 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{.}3$ million. Does that mean that your answers to parts $($a$)$ and

$($b$)$ must be identical? Explain.

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

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

After ABC made a cash offer to purchase $xYZ$ for $$3\mathrm{.}3$ million, the price of $xYZ$ is $$,$ per share. $($Round to the nearest cent.$)$