Question
company that has equity value of 75 billion dollars is proposing an acquisition of a competitor in the same industry whose equity is worth 41
company that has equity value of 75 billion dollars is proposing an acquisition of a competitor in the same industry whose equity is worth 41 billion dollars. The synergies associated with the merger have been estimated to be equal to 9 billion dollars.Suppose that the acquirer has 4 billion shares outstanding, and the target has 5 billion shares outstanding. Assume that the acquirer is paying 50 billion for the equity of the target and that the acquirer stock price will stay at 18.75 dollars a share. What should be the exchange ratio for this merger in a stock deal?1 point0.44 shares of the acquirer for each target share1.875 shares of the acquirer for each target share0.53 shares of the acquirer for each target share1 share of the acquirer for each target share
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