Question
The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $28 per share, and LE is trading for $62 per share,
The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $28 per share, and LE is trading for $62 per share, implying a pre-merger value of LE of approximately $5.5 billion. If the projected synergies are $1.48 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
