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HELP ASAP!!!! ( A B C ) has 1 million shares outstanding, each of which has a price of ( $ 25 ). It has
HELP ASAP!!!!
\\( A B C \\) has 1 million shares outstanding, each of which has a price of \\( \\$ 25 \\). It has made a takeover offer of \\( X Y Z \\) Corporation which has 1 million shares outstanding, and a price per share of \\$2.29. Assume that the takeover will occur with certainty and all market participants know this. Furthermore, there are no synergies to merging the two firms. a. Assume \\( A B C \\) made a cash offer to purchase \\( X Y Z \\) for \\( \\$ 4.75 \\) million. What happens to the price of \\( A B C \\) and \\( X Y Z \\) on the announcement? What premium over the current market price does this offer represent? b. Assume \\( A B C \\) makes a stock offer with an exchange ratio of 0.19 . What happens to the price of \\( A B C \\) and \\( X Y Z \\) this time? What premium over the current market price does this offer represent? c. At current market prices, both offers are offers to purchase \\( X Y Z \\) for \\( \\$ 4.75 \\) million. Does that mean that your answers to parts (a) and (b) must be identical? Explain. a. Assume \\( A B C \\) made a cash offer to purchase \\( X Y Z \\) for \\( \\$ 4.75 \\) million. What happens to the price of \\( A B C \\) and \\( X Y Z \\) on the announcement? The price of \\( X Y Z \\) is on the announcement is \\( \\$ \\quad \\) per share. (Round to the nearest cent.)Step by Step Solution
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