Taggart Transcontinental and Phoenix-Durango Have Entered into a Stock Swap

question 45

Multiple Choice

Taggart Transcontinental and Phoenix-Durango have entered into a stock swap merger agreement whereby Taggart will pay a 30% premium over Phoenix-Durango's premerger price.If Taggart's premerger price per share was $15 and Phoenix-Durango's was $30,then the exchange ratio that Taggart will offer is closest to:

• A)0.4:1.
• B)1.8:1.
• C)2.0:1.
• D)2.6:1.

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