Show set up in Excel: Let us say John is the CFO of a $$1$ billion firm $($market capitalization$)$ and Jacob is the CFO of a $$0\mathrm{.}5$ billion firm $($market capitalization$).$ John$$s firm is paying a $20\%$ premium over the market cap $($in cash$)$ to Jacob$$s firm. Assume that a share of John$$s firm trades at $$1$ and a share of Jacob$$s firm also sells for $$1$ before the merger is announced. The combined entity $($JohnJacob firm$)$ plans to mail the shareholders of John$$s firm and Jacob$$s firm an equal number of shares they hold before the merger in a big fat envelope and scrap all the old shares of entities within $1$ days of the completion of the merger $($when both shareholders approve the merger and everything goes through$).$ Question: What will be the price of a new share of the combined firm $($say JohnJacob firm$)$ on completion of the merger?