Question: please include steps and explanations! thanks ABC Corp. has a market value of $600 million and 30 million shares outstanding. XYZ Inc. has a market
please include steps and explanations! thanks
ABC Corp. has a market value of $600 million and 30 million shares outstanding. XYZ Inc. has a market value of $200 million and 20 million shares outstanding. ABC is contemplating acquiring XYZ. ABC 's CFO concludes that the combined firm with synergy will be worth $1 billion and XYZ can be acquired at a premium of $150 million. A) If ABC offers 15 million shares to exchange for the 20 million shares of XYZ, what will the post-acquisition stock price of ABC be? B) To make the value of stock offer equivalent to a cash offer of $300 million, what would be the proper exchange ratio of the two stocks
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