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 Bs share for four shares in the merged company.
What will be the total benefit for the existing shareholders of A?
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Cornerstones of Financial and Managerial Accounting
Authors: Rich Jones, Mowen, Hansen, Heitger
1st Edition
9780538751292, 324787359, 538751290, 978-0324787351
