18 -27

Corpo ABC net worth is 20M while Corpo XYZ net worth is 40M
- Ratio would be 1:2 (1/3 2/3) or 33.33% - 66.67%
- ABC will now hold 33.33% of the stock and XYZ will now hold
66.67%. This will be the extent of their capitalization
If they intend to go 50-50, what do you think should XYZ require from
ABC?
- XYZ will require ABC to contribute more assets
- Add 20M more assets
- Reflected now on the articles of merger
If this were a merger, who will now pay the loans?
- it is now the surviving corporation
Which of the two should be the surviving corporation?
- bigger is not always better size does not matter!
- you think in the long run, give emphasis to the market share,
XYZ is already known to the public it can generate more
income