Question
Suppose that before A acquired B, market values of companies A and B were $500,000 and $200,000, respectively, the number of shares of A and
Suppose that before A acquired B, market values of companies A and B were $500,000 and $200,000, respectively, the number of shares of A and B were 25,000 and 20,000, respectively.
Question 5 options:
| If the deal price is $12 per share and exchange ratio is 0.6, then the share holders of the bidder company will own 71% and those of of target company will own 39% of the combined company. |
| If the deal price is $12 per share and exchange ratio is 0.6, then the share holders of the bidder company will own 56% and those of of target company will own 44% of the combined company. |
| If the deal price is $12 per share and exchange ratio is 0.6, then the share holders of the bidder company will own 68% and those of of target company will own 32% of the combined company. |
| If the deal price is $12 per share and exchange ratio is 0.6, then the share holders of the bidder company will own 60% and those of of target company will own 40% of the combined company. |
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