Target has a market value of half a million dollars and also 30 million shares outstanding. Walmart has a market value of $275 million dollars and 20 million shares outstanding. Target is deciding to acquire Walmart, their CEO determines that the combined firm with synergy will be worth $1,000 million and that Walmart can be acquired at a $25 million premium.

1. If Target gives 15 million shares of their stock for 20 million Walmart shares, what will be Targets share price after the acquisition?

2. What is the exchange ratio between both the stocks that would make the value of the stock offer equal to a $300 million cash offer?

3. If Target was making a $300 million cash offer for Walmart and there were no synergies, what is Target's new stock value after the merge?

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