Please show all your work and explain in detail.

Northrop Grumman initiated a tender offer for 100% of TRWs common shares by offering to exchange $47 worth of Northrop Grumman common stock, whose market value at that time was $108, for each share of TRW common stock. The $47 offer price would be allowed to fluctuate between the signing of the purchase agreement and closing within a narrow range by placing a collar of plus 5% or minus 5% around the $108 Northrop Grumman share price on the tender offer announcement date.

1.What is the share exchange ratio implied by the Northrop Grumman tender offer?

2.What are the lower limit and upper limit share exchange ratios Northrop Grumman used in constructing the collar arrangement?

3.How does the collar arrangement protect TRW shareholders? Northrop Grumman shareholders?