Question
The Blue Oil Corporation and the Grey Plastics Company have agreed to a merger. The Grey Plastics stockholders will receive 0.75 shares of Blue for
The Blue Oil Corporation and the Grey Plastics Company have agreed to a merger. The Grey Plastics stockholders will receive 0.75 shares of Blue for each share of Grey held. Assume that no synergistic benefits are expected. Complete the following table:
| Blue Oil | Grey Plastics | Combined Companies | |
| Common shares outstanding (millions) | 16 | 4 |
Here are two answers for the queation. Which one is correct? Why?
1. Combined common shares outstanding (millions) = $16* 0.75 + $4 = $16
2. Combined common shares outstanding (millions) = $16 + 0.75 * $4 = $19
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Personal Financial Planning For Executives And Entrepreneurs
Authors: Michael J. Nathanson, Jeffrey T. Craig, Jennifer A. Geoghegan, Nadine Gordon Lee, Michael A. Haber, Seth P. Hieken, Matthew C. Ilteris, D. Scott McDonald, Joseph A. Salvati, Stephen R. Stelljes
1st Edition
3030405273, 978-3030405274
