This Question: 6 pts ment 2021 SP 19 of 25 (14 complete) Time Remaining: 00:41:51 Subm This Test: 100 pts p ABC has 1 million shares outstanding, each of which has a price of $24. It has made a takeover offer of XYZ Corporation which has 1 million shares outstanding, and a price per share of $2.64. Assume that the takeover will oc with certainty and all market participants know this. Furthermore, there are no synergies to merging the two firms. a. Assume ABC made a cash offer to purchase XYZ for $4.08 million. What happens to the price of ABC and XYZ on the announcement? What premium over the current market price does this offer represent? b. Assume ABC makes a stock offer with an exchange ratio of 0.17. What happens to the price of ABC and XYZ this time? What premium over the current market price does this offer represent? c. At current market prices, both offers are offers to purchase XYZ for $4.08 million. Does that mean that your answers to parts (a) and (b) must be identical? Explain. a. Assume ABC made a cash offer to purchase XYZ for $4.08 million. What happens to the price of ABC and XYZ on the announcement? The price of XYZ is on the announcement is $ per share. (Round to the nearest cent.) The premium over the current market price is %. (Round to the nearest two decimal places.) The price of ABC on the announcement is $ per share. (Round to the nearest cent.) b. Assume ABC makes a stock offer with an exchange ratio of 0.17. What happens to the price of ABC and XYZ this time? The price of ABC is $ per share. (Round to the nearest cent.) The price of XYZ is $per share. (Round to the nearest cent.) The premium over the current market price will be %. (Round to the nearest decimal place.) c. At current market prices, both offers are offers to purchase XYZ for $4.08 million. Does that mean that your answers to parts (a) and (b) must be identical? Explain. (Select from the drop-down menus.) Enter your answer in each of the answer boxes. e W P 6:25 A 3/06/20