The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share, and LE is trading for $57 per share, implying a pre-merger value of LE of approximately $8.4 billion. If the projected synergies are $2.89 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?
The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share, and LE is trading for $57 per share, implying a pre-merger value of LE of approximately $8.4 billion. If the projected synergies are $2.89 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 7P
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![The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share, and LE is
trading for $57 per share, implying a pre-merger value of LE of approximately $8.4 billion. If the projected synergies
are $2.89 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive
NPV?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40852b75-c577-47e7-9dee-931d83532082%2F53cbc5e6-8b0a-4d26-ad5e-ba180c49a488%2Fs1akkjl_processed.png&w=3840&q=75)
Transcribed Image Text:The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $50 per share, and LE is
trading for $57 per share, implying a pre-merger value of LE of approximately $8.4 billion. If the projected synergies
are $2.89 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive
NPV?
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