What is the control premium percentage offered

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Reference no: EM131315586

Mega Service Corporation (MSC) is offering to exchange 2.5 shares of its own stock for each share of target firm Norman Corporation stock as consideration for a proposed merger.

There are ten million Norman Corp shares outstanding, and its stock price was $60 before the merger offer. MSC's preoffer stock price was $30. What is the control premium percentage offered?

Now suppose that when the merger is consummated eight months later, MSC's stock price drops to $25. At that point, what is the control premium percentage and total transaction value?

Reference no: EM131315586

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