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Lululemon has 1 million shares outstanding, and its share price is $10. It has made a takeover offer of Mirror Corporation which has 1 million

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Lululemon has 1 million shares outstanding, and its share price is $10. It has made a takeover offer of Mirror Corporation which has 1 million shares outstanding and a price per share of $1. Assume that the takeover will occur with certainty and all market participants know this. There will be synergies of $1 million from merging the two firms. Assume Lululemon decides to make a cash offer to purchase Mirror Corporation for $1.5 million. After the announcement, a. What is the stock price of Mirror Corporation? b. What is the stock price of Lululemon? Assume Lululemon decides to make an all stock offer with an exchange ratio of 0.15. c. How many new shares Lululemon needs to issue? d. What is the stock price of Lululemon after the announcement? e. What is the stock price of Mirror Corporation after the announcement

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