Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the stock exchange ratio if Firm A negotiates a merger with Firm B and if all the synergy gain goes to Firm A's shareholders?

Firm A:

Market value of debt: $4 million

Market value of equity: $6 million

Number of shares: 0.5 million

Estimated total firm value based on value-based management model: 12 million

Firm B:

Market value of debt: $6 million

Market value of equity: $7 million

Number of shares: 0.5 million

Estimated total firm value based on value-based management model: 15 million

Select one:

a. 2.1332, that is, 1 B share exchanges for 2.1332 A shares.b. 1.0156, that is, 1 A share exchanges for 1.0156 B shares.c. 1.4286, that is, 1 A share exchanges for 1.4286 B shares.d. 2.1332, that is, 1 A share exchanges for 2.1332 B shares.e. 1.4286, that is, 1 B share exchanges for 1.4286 A shares.f. 1.0156, that is, 1 B share exchanges for 1.0156 A shares.