Question
Company A considers acquiring company B. Shares of the company A trade at $30 and there are 5,000 of A shares outstanding. Company B has
Company A considers acquiring company B. Shares of the company A trade at $30 and there are 5,000 of A shares outstanding. Company B has 200 shares outstanding worth $100 each. If A acquires B, then the resulting synergy will amount to $10,000.
Suppose A offers to exchange every B's share for $130 in cash. What will be the share price of the merged company?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
15th edition
77861612, 1259194078, 978-0077861612, 978-1259194078
