Dakota Inc. is planning a friendly takeover of Montana Corp. Dakota’s stock currently trades at $30 per share (100 million shares outstanding), Montana’s stock price is $8 (50 million shares outstanding). Acquisition will be in a form of equity swap with offer price for Montana’s stock at $12.00 per share: 

a) Find individual stock prices of both companies after announcement. 

b) Find PPS of a combined firm after the takeover. 

c) Find the premium that acquiring firm will pay (in $ per share).

Answer rating: 100% (QA)

Market price of shares Dakota Inc 30 Shares outstanding 100 Million 50 Million 3000 Value of the ... View the full answer