KT corporation has announced plans to acquire MJ corporation.KT is trading for $45 per share and MJ is trading for $25 per share,with a premerger value for MJ of $3 billion dollars.If the projected synergies from the merger are $750 million,what is the maximum exchange ratio that KT could offer in a stock swap and still generate a positive NPV?

Question

Quizplus · Accepted Answer

The Answer of KT corporation has announced plans to acquire MJ corporation.KT is trading for $45 per share and MJ is trading for $25 per share,with a premerger value for MJ of $3 billion dollars.If the projected synergies from the merger are $750 million,what is the maximum exchange ratio that KT could offer in a stock swap and still generate a positive NPV?

KT Corporation Has Announced Plans to Acquire MJ Corporation