Consider the following example of a deal with 2 companies, ABC and XYZ, with share prices $45 and $25, and shares on issue of 130,000 and 65,000 respectively. Consider the availability of $325,000 of synergistic benefits associated with a merger.

If ABC were to make a cash offer which of the following is closest to the maximum price they would be willing to pay per share to XYZ (that is the point at which ABC become indifferent to the deal)?

1 point

$25

$27

$30

$45