Companies A and B have decided to merge B will absorb A The following are financial data of the two companies Company A Company B assets 7 000 000$ 3 300 000$ liabilities 2 500 000$ 1 750 000$ clean seat 4 500 000$ 1 550 000$ number of shares 220 000 45 000 the nominal value of shares 15$ 9$ A Calc...

Sol A Exchange Ratio IS a B ...

Companies A and B have decided to merge. B will absorb A. The following are financial data

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Question:

Companies A and B have decided to merge. B will absorb A. The following are financial data of the two companies:

	Company A	Company B
assets	7.000.000$	3.300.000$
liabilities	2.500.000$	1.750.000$
clean seat	4.500.000$	1.550.000$
number of shares	220.000	45.000
the nominal value of shares	15$	9$

A. Calculate the exchange ratio of the above merger.
B. Will there be an increase in share capital? If so, calculate the amount.
C. How much money will be paid and why?

The exercise does not give exchange terms.