Companies A and B are valued as follows:

Both companies are 100% equity financed. Company A now acquires B by offering two (new) shares of A for every three shares of Company B. Suppose that the merger really does increase the value of the combined firms by $18,000. What is the net gain to target shareholders?

A.	$4,000
	B.	$0
	C.	$17,000
	D.	$1,000
	E.	None of the above

# of shares Earnings per share Share price A 2000 $10 $100 B 1000 $10 $50