O 1 75%AT&T LTE11:52 AMExit315.Loki, Inc. and Thor, Inc. have entered into astock-swap merger agreement wherebyLoki will pay a 39% premium over Thor'spre-merger price. If Thor's pre-mergerprice per share was $42 and Loki's was $51, what exchange ratio will Loki need tooffer?0.72 shares of Loki for each shareof Thor1.14 shares of Loki for each shareof Thor1.42 shares of Loki for each shareof Thor0.86 shares of Loki for each shareof Thor

Question
Asked Dec 7, 2019
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O 1 75%
AT&T LTE
11:52 AM
Exit
31
5.
Loki, Inc. and Thor, Inc. have entered into a
stock-swap merger agreement whereby
Loki will pay a 39% premium over Thor's
pre-merger price. If Thor's pre-merger
price per share was $42 and Loki's was $51
, what exchange ratio will Loki need to
offer?
0.72 shares of Loki for each share
of Thor
1.14 shares of Loki for each share
of Thor
1.42 shares of Loki for each share
of Thor
0.86 shares of Loki for each share
of Thor
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O 1 75% AT&T LTE 11:52 AM Exit 31 5. Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 39% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $42 and Loki's was $51 , what exchange ratio will Loki need to offer? 0.72 shares of Loki for each share of Thor 1.14 shares of Loki for each share of Thor 1.42 shares of Loki for each share of Thor 0.86 shares of Loki for each share of Thor

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Expert Answer

Step 1

Stock swap merger agreement refers to exchange of one equity based asset for the other. This is done in the case of merger and acquisitions.

Step 2

Given that;
Thor's premerger price is $42
Premium percentage is 39%

Step 3
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Stock price as per swap merger agreement=(Thor's premerger price)x (1+Premium percentage) =(42)x(1+39%)=58.38

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