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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Definitions:

Median-Voter Model

A theoretical framework suggesting that the outcome of majority-rule voting systems will reflect the preferences of the median voter.

Political Logrolling

A practice where politicians exchange favors by supporting each other’s proposed legislations or policies.

Median-Voter Model

A model in political science that suggests the outcome of a majority vote is most likely to represent the preferences of the median voter.

Paradox Of Voting

The situation where individual rational actors have little incentive to vote, considering their single vote is unlikely to change the outcome, yet voting occurs on a large scale.