When Comox Tires, Inc stock is trading for $19 per share, and the company has a value of $37 billion they announce plans to acquire Saratoga Oil Changers at a premium of 30% over Saratoga’s share price of $12 per share. Saratoga has 192 million shares outstanding. The projected synergies from the merger are $2 billion. What is the maximum exchange ratio that Comox Tires could offer in a stock swap transaction and still generate a positive NPV? 

1.  1.54 

2.  1.05 

3.  1.37 

4.  2.03

Answer rating: 100% (QA)

option 3 is correct Exchange ratio 137 Benefit... View the full answer