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Suppose that the acquirer has 8 billion shares outstanding, and the target has 6 billion shares outstanding. Assume that the acquirer is paying a 2

Suppose that the acquirer has 8 billion shares outstanding, and the target has 6 billion shares outstanding. Assume that the acquirer is paying a 25% premium for the target (30 billion for the equity) and that the acquirer stock price will stay at 10 dollars a share. What should be the exchange ratio for this merger in a stock deal?
Answer:
This is the formula. The price for the deal is target share price*(1+premium),
then, deal price = Acquirer stock price * Exchange ratio, solve for exchange ratio

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