What is the exchange ratio in this merger for each

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The Los Angeles Consolidated Banking Corporation (LACBC) has proposed acquiring San Diego Ranch Financing, Inc. (SDRF) in a stock-swap acquisition. The proposed deal contains a collar. This is the way that the collar works: the exchange ratio is fixed at 0.45 as long as LACBC's stock price is between $20 and $30 when the acquisition is completed. If LACBC's stock price is below $20 when the acquisition is completed, then the exchange ratio changes to provide target shareholders with $9 worth of acquirer stock per target share. And if LACBC's stock price is above $30 when the acquisition is completed, then the exchange ratio changes to provide target shareholders with $13.50 worth of acquirer stock per target share. What is the exchange ratio (rounded to two decimal places) in this merger for each of the following acquirer share prices at closing: $17, $25, and $33?

Reference no: EM131963705

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