I have a question relating to the number of shares outstanding after a takeover. To keep things simple, lets forget about options for now.
Company A has 1 million shares currently outstanding. Company A wants to takeover company B which currently has 500 000 shares outstanding.
Company A also offers Company B 0.5 shares of Company's A share for every 1 share in Company B.
So are my calculations correct?
Company A Company B Company New Shares
1,000,000 + 500,000 + (0.5 x 500,000)
= 1,750,000 now outstanding (after takeover is complete)
Is this correct?