What is the minimum exchange ratio is necessary to keep the


(Stock for Stock Merger) A Corporation is considering the acquisition of X Corporation.   Each corporation has the following data:

Existing Income                                      Number of Shares               

A Corporation                                                            $8,200,000                                                                 621,000

X Corporation                                                            $4,200,000                                                                 365,000

Synergistic additional benefits from the combination are $1,800,000.

What is the minimum exchange ratio is necessary to keep the X shareholders whole in terms of earnings per share?

What is the maximum exchange ratio would the A Corporation shareholder accept in taking over X Corporation and remain whole in terms of earnings per share? (note you will need to use the formulas in the book to solve this)

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the minimum exchange ratio is necessary to keep the
Reference No:- TGS02659161

Expected delivery within 24 Hours