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exchange ratio and merger question At the time America Online (AOL) announced plans to acquire Time Warner in January 2000, AOL stock was trading for

exchange ratio and merger question

At the time America Online (AOL) announced plans to acquire Time Warner in January 2000, AOL stock was trading for $73.76 per share and Time Warner stock was trading for $65.69 per share. If the projected synergies were $40 billion, and Time Warner had 2.2 billion shares outstanding, what is the maximum exchange ratio AOL could offer in a stock swap and still generate a positive NPV? What is the maximum cash offer AOL could make

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