Calculate the new share price of big corp

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Big Corp is planning to fully acquire Small Corp. Big Corp currently has 10 million shares outstanding with a share price of $50 and total outstanding debt of $100 million (no excess cash). Small Corp currently has 5 million shares outstanding with a share price of $30 and total outstanding debt of $50 million (no excess cash). Big Corp plans an all cash offer and will offer $38 per share of Small Corp. The transaction will be financed with a new bank loan and Big Corp will assume all outstanding debt of Small Corp. Synergies from the transaction are expected to be $80 million. Calculate the new share price of Big Corp after the acquisition ( PBig+Small ). Round your result to two decimals (do not include the $-symbol in your answer).

Reference no: EM133061555

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