Share of their stock for every share of target firms stock

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Reference no: EM13943580

Suppose that prior to a merger the stock price of the target company was $50 and the stock price of the acquiring company was $40. If the acquiring firm agrees to pay 1.5 share of their stock for every share of the target firms stock, then what premiums are they offering?

a. 10%

b. 20%

c. 25%

d. 33%

Reference no: EM13943580

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