Greentree Holdings has announced plans to acquire Mackinac Corporation.Greentree is trading for $15.75 per share and has a premerger value of $950 million,while Mackinac is trading for $24 per share and has a premerger value of $225 million dollars.If the projected synergies from the merger are $95 million,what is the maximum exchange ratio that Greentree could offer in a stock swap and still generate a positive NPV?
A)0.933
B)1.676
C)2.167
D)0.722
E)1.885

Question

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The Answer of Greentree Holdings has announced plans to acquire Mackinac Corporation.Greentree is trading for $15.75 per share and has a premerger value of $950 million,while Mackinac is trading for $24 per share and has a premerger value of $225 million dollars.If the projected synergies from the merger are $95 million,what is the maximum exchange ratio that Greentree could offer in a stock swap and still generate a positive NPV?
A)0.933
B)1.676
C)2.167
D)0.722
E)1.885

Greentree Holdings Has Announced Plans to Acquire Mackinac Corporation