(i) Loki, Inc., and Thor, Inc., have entered into a stock swap merger agreement whereby Loki will pay a 22% premium over Thor’s premerger price. If Thor’s premerger price per share was $42 and Loki’s was $53, what exchange ratio will Loki need to offer?
(ii) The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading for $48 per share and LE is trading for $74 per share, implying a premerger value of LE of approximately $4.5 billion. If the projected synergies are $1.48 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?