At the time Microsoft announced plans to acquire Nokia in December 2004, Microsoft stock wastrading for $25 per share and Nokia stock was trading for $30 per share. If the projected synergieswere $12 billion, and Nokia had 1.033 billion shares outstanding, what is the maximumexchange ratio Microsoft could offer in a stock swap and still generate a positive NPV? What is themaximum cash offer Microsoft could make?

At the time Microsoft announced plans to acquire Nokia in December 2004, Microsoft stock wastrading for $25 per share and Nokia stock was trading for $30 per share. If the projected synergieswere $12 billion, and Nokia had 1.033 billion shares outstanding, what is the maximumexchange ratio Microsoft could offer in a stock swap and still generate a positive NPV? What is themaximum cash offer Microsoft could make?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

ChapterP3: Part 3: Exchange Rate Risk Management

Section: Chapter Questions

Problem 4Q

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