Consider the following premerger information about a bidding firm (Firm B)and a target firm (Firm T). Assume that both firms have no debt outstanding.

Shares outstandingFIRM B 5,600 FIRM T 1,500

Price per share FIRM B $54 FIRM T $24

Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,000. Firm T can be acquired for $26 per share in cash or by exchange of stock wherein B offers one of its shares for every two of T's shares.

At what exchange ratio of B shares to T shares would the shareholders in T be indifferent between the two offers?

Exchange ratio =