Topez Ltd has a market value of R200 million and their shares trade at R15 price per share, while Newman Ltd has a market value of R125 million and a market price per share of R10. Topez is planning to acquire Newman, and the managers of Topez have found that the combined firm will be valued at R373.5 million. The board of Newman has indicated that they will sell if Topez pays R180 million in cash or stock. The fair exchange ratio for the stocks of the two firms will be ____________.

a.

0.94:1

b.

0.30:1

c.

0.87:1

d.

1.60:1

e.

0.99:1

 give correct answer with calculation in step by step and explanation.