answer rest of part a then b and c please ABC has 1.00 million shares outstanding, each of which has a price of $15. It has made a takeover offer of XYZ Corporation, which has 1.00 million shares outstanding, and a price per share of $2.33. Assume that the takeoverwill occur with certainty and all market participants know this. Furthermore, there are no synergies to merging the two firms.a. Assume ABC made a cash offer to purchase XYZ for $3.93 million. What happens to the price of ABC and XYZ on the announcement? What premium over the current market price does this offer represent?b. Assume ABC makes a stockr with an exchange ratio of 0.13. What happens to the price of ABC and XYZ this time? What premium over the current market price does this offer represent?c. At current market prices, both offers are offers to purchase XYZ for $3.93 million. Does that mean that your answers to parts (a) and (b) must be identical? Explain.a. After ABC makes a cash offer to purchase XYZ for $3.93 million, the price of XYZ is $ 3.93 per share. (Round to the nearest cent.)This represents a premium of 68.7 %. (Round to one decimal place.)The price of ABC is $ per share. (Round to the nearest cent.)

Given: Particulars Amount ABC Shares outstanding 1 Million Price $16.00 XYZ Shares…

Answered: ABC has 1.00 million shares…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 7P

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Firm E is going to acquire Firm F. The acquisition will be done via a share exchange, whereby Firm E will exchange 2.65 of its shares for every one of Firm F's shares. Synergy is $1,250,000 in total. Firm E has 350,000 shares outstanding trading at $35 each. Firm F has 45,000 shares outstanding trading at $84 each. What would the exchange ratio have to be for the NPV of the deal to be zero? Question 1 options: A) 3.13 shares of E for every 1 of F B) 0.41 shares of E for every 1 of F C) 3.15 shares of E for every 1 of F D) 2.40 shares of E for every 1 of F E) 3.19 shares of E for every 1 of F
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Vijay
I dont understand part d. Please expalin in simple steps
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I don't understand C part. Please explain step by step
Y2

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