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LeftShoe Corp. has 10 million shares outstanding, each trading at $20 per share. RightShoe Corp. has 5 million shares outstanding, each trading at $40 per

LeftShoe Corp. has 10 million shares outstanding, each trading at $20 per share. RightShoe Corp. has 5 million shares outstanding, each trading at $40 per share. LeftShoe wants to acquire RightShoe. The acquisition will result in net synergies of $100 million. Assume that the pre-merger share prices reflect standalone values (that is, investors didnt anticipate acquisition). Suppose LeftShoe announces a stock offer to acquire RightShoe. What exchange ratio should it offer so that the synergies are shared equally by LeftShoe and RightShoe shareholders?

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