Company A wants to acquire company B on a share for share exchange as part of its corporate reorganization strategy. A is offering sh.36 for each share of B currently trading at sh. 32. The market price per share of A shares is 48. Company B has 2 000 000 issued and fully paid up shares.
Calculate the exchange ratio and the amount of premium paid to the
shareholders of company B.
(6 marks)

Answer rating: 100% (QA)

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