Bavarian Brew is planning on acquiring Bavarian Sausage in a pure exchange merger. Bavarian Brew's stock is currently trading at $35 and they set the exchange ratio at 0.80. Bavarian Sausage has 75 million shares outstanding which are currently trading at $18 a share.
-How many shares will Bavarian Brew issue in exchange for Bavarian Sausage's shares.
A) 75 million
B) 60 million
C) 100 million
D) 50 million
Correct Answer:
Verified
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