Bavarian-Bavarian Merger Bavarian Brew Is Planning on Acquiring Bavarian Sausage in a in a Pure

Bavarian-Bavarian Merger
Bavarian Brew is planning on acquiring Bavarian Sausage in a pure exchange merger. Bavarian Brew’s stock is currently trading at $45 and they set the exchange ratio at 1.80. Bavarian Sausage has 75 million shares outstanding which are currently trading at $23 a share.

Twelve months after the merger Bavarian Brew’s stock price drops to $37.

-What is the transaction value of the merger for Bavarian Brew?

A) $3.375 billion
B) $6.075 billion
C) $135 million
D) $1.350 billion