Grab Corp is planning to divest its cellophane tape division, and it wants to use a split- off transaction (in a split off, Grab Corp will offer shares of its cellophane tape division to its current stockholders in exchange for Grab Corp stock). It previously took the cellophane tape division public in an equity carve-out, selling 20% of the division's 50M total shares at an IPO price of $10 per share. The division's stock has traded at around $10 per share ever since, which correctly reflects its stand-alone value.

As part of the split-off transaction, Grab Corp wants to signal to the market that its stock (i.e., Grab Corp stock) is undervalued by about 10%. Grab Corp currently has 100M shares outstanding, and they are trading for $25 per share.

1. What exchange ratio should Grab Corp offer to its shareholders (in terms of cellophane tape division shares per Grab Corp share) in the split-off to accomplish its goal?
2. If 50M Grab Corp shares are tendered and the offer is completed on a pro rata basis, what percentage of their tendered shares will each tendering shareholder have exchanged?