Dexter Department Stores has a market value of $400 million and 20 million shares outstanding. Walnut Stores has a market value of $134 million and 13.4 million shares outstanding. Dexter is deciding to acquire Walnut Stores. The top management of Dexter's have determined that due to the synergies between the firms the combination will worth $667 million. Dexter expect to pay a $67 million premium for Walnut Stores. If Dexter were to make an offer of $201 million in stock for Walnut what would the exchange ratio be?
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