Company A has made an offer to take over all the shares in Company B on the following terms:
• For every 20 shares currently held, Company B's shareholders will receive $100 bond with a coupon rate of 3%
• The bond will be repaid in 10 years' time at its par value of $100.
• The current yield on 10 year bonds of similar risk is 6%.
What is the effective offer price per share being made to Company B's shareholders?
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