Freeport Manufacturing has a market value of $600 million, and 30 million shares outstanding. Portland Industries has a market value of $200 million, and 20 million shares outstanding. Freeport is contemplating acquiring Portland Industries. The CFO of Freeport concludes that the combined firm with synergy will be worth $1 billion.

a) If Freeport offers 15 million shares to exchange for the 20 million shares of Portland, what will be the after-acquisition per share stock price of Freeport?

b) How many shares of stock should Freeport offer the shareholders of Portland Industries, if it wants to structure a stock offer that has a cash value of $300 million?