If b offers three of its shares for every five of ts shares


Bidding firm (Firm B) has 5679 shares outstanding that are currently selling at $47 per share. Target firm (Firm T) has 1691 shares outstanding that are currently selling at $16 per share. Assume that both firms have no debt outstanding. Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8327. Suppose Firm T is agreeable to a merger by an exchange of stock. If B offers three of its shares for every five of T's shares, what is the NPV of the merger?

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Financial Management: If b offers three of its shares for every five of ts shares
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