Business, 06.05.2020 01:33 nevaehkb

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T). Assume that both firms have no debt outstanding. Firm B Firm T Shares outstanding 5,800 1,700 Price per share $ 55 $ 25 Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $8,100. Firm T can be acquired for $27 per share in cash or by exchange of stock wherein B offers one of its share for every two of T's shares. Are the shareholders of Firm T better off with the cash offer or the stock offer?

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