Mega service corporation msc is offering to exchange 25, Ask an Expert

Finance

Mega Service Corporation (MSC) is offering to exchange 2.5 shares of its own stock for each share of target firm Norman Corporation stock as consideration for a proposed merger.

There are ten million Norman Corp shares outstanding, and its stock price was $60 before the merger offer. MSC's preoffer stock price was $30. What is the control premium percentage offered?

Now suppose that when the merger is consummated eight months later, MSC's stock price drops to $25. At that point, what is the control premium percentage and total transaction value?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92070196

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