Bank of America’s agreement to buy mortgage giant Countrywide Financial in a $4 billion all-stock deal put investors at ease yesterday, sky-rocketing shares of Countrywide by 51%, after the mortgage crisis sank the stock below the $5 level. The deal gives Countrywide 0.1822 share of Bank of America for each share they own, valuing Countrywide at $7.16 each, a 7.6% discount.
This deal is a landmark in the mortgage crisis, given the history of Countrywide being the nation’s biggest mortgage lender until recently.
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