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A and B are all-equity firms: Acquirer (Firm A) Firm that's being acquired (Firm B) Currently has 3,000 shares outstanding at a market price of

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A and B are all-equity firms: Acquirer (Firm A) Firm that's being acquired (Firm B) Currently has 3,000 shares outstanding at a market price of $35 a share Currently has 1,800 shares outstanding at a price $30 a share Firm A is acquiring Firm B, and is paying $56,000 for it in cash. The synergy value from this acquisition is $7,000. HINT: For the two computational questions below, you won't need to use some of the numbers that are given. The net present value of this acquisition to the acquiring firm equals $ 4. Select a numeric value. This also implies that it paid a $ premium. Select a numeric value. TRUE OR FALSE? In general, all else held constant, the higher the synergy the higher the net present value of an acquisition to the acquiring firm. This statement is 4. Select true or false

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