Question: 1-Considering the follow premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no…
A firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $7,900. Firm T can be acquired for $25 per share in cash or by exchange of stock wherein B offers one of its shares for every two of T’s shares.
Throughout such exchange ratio of B shares to T shares would the shareholders in T be indifferent between the two offers? (Not round intermediate calculations and round your answer to 4 decimal places)
Exchange ratio _____ to 1