Assume that both firms have no debt outstanding

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Bidding firm (Firm B) has 5653 shares outstanding that are currently selling at $45 per share. Target firm (Firm T) has 1608 shares outstanding that are currently selling at $18 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 $8891.

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 will be the price per share of the merged firm.

Reference no: EM132003463

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