Question
Firm M is currently trading at $45 per share with 60,000 shares outstanding, while Firm N is trading at $22 per share and it has
Firm M is currently trading at $45 per share with 60,000 shares outstanding, while Firm N is trading at $22 per share and it has 100,000 shares outstanding. Firm M wants to acquire Firm N in a stock swap, and the synergy value of the deal would be $500,000. What is the maximum exchange ratio (per Firm N share) that Firm M can offer Firm N and still have a non-negative NPV for Firm M?
2.5 share
0.6 shares
0.4 shares
2.6 shares
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Corporate Finance With Connect Access Card
Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe
10th Edition
1259672484, 978-1259672484
