Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1

image text in transcribed

Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1 million shares outstanding. Big Fish expects a discounted synergistic value of $1 million from the merging of operations of the two firms. If Big Fish pays cash of $2.2 million to Little Fish's shareholders, what is the NPV of the acquisition? Multiple Choice $1,400,000 $1,000,000 O o $1,200,000 $800,000 $1,600,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

978-0538473637

Students also viewed these Finance questions