I was wondering what are the steps in finding b thank you!

- Gain =VAT(VA+VT)=VAT - Net cost =bVATVT - NPV= Gain - Net cost =VAT(bVATVT) - b is the proportion of combined firm owned by the target shareholders following the merger Exchange ratio: the number of bidder shares received in exchange for each target share - If the exchange ratio is set too high (low), there will be a transfer of wealth from the bidding (target) firm's shareholders to the target (bidding) firm's shareholders - We can find the maximum exchange ratio the bidder could offer in a share bid at which the NPV of the takeover to the bidder is zero - ABC offer 3 shares for every 10 shares of XYZ. The synergistic benefits are expected to be $3m. ABC 's pre-bid share price is $20 and its number of shares outstanding is 5m. XYZ's pre-bid share price is $5 and its number of shares outstanding is 2m. - What is the for XYZ to ABC