Company ACQ is planning to acquire Company TAR. ACQ currently has 1,800 shares outstanding and a share price of $52. TAR has 1,300 shares outstanding and a share price of $40. The synergy of the acquisition is estimated to be $13,000. 

 

(a) Calculate the cost of acquisition if TAR agrees to a cash offer of $28 per share. (Show your calculations).

 

 (b) What exchange ratio between the 2 stocks would make the actual cost of the stock offer identical to the cost of the cash offer of $15? (Show your calculations). 

Answer rating: 100% (QA)

a To calculate the cost of acquisition if TAR agrees to a cash offer of 28 per share we need to mult... View the full answer