Question
Consider the following premerger information about Firm X and Firm Y Firm X Firm Y Total Earnings $88,248 $40,413 Shares outstanding 42,393 33,057 Per-share values:
Consider the following premerger information about Firm X and Firm Y
| Firm X | Firm Y | |
| Total Earnings | $88,248 | $40,413 |
| Shares outstanding | 42,393 | 33,057 |
| Per-share values: | ||
| Market | $50 | $17 |
| Book | $22 | $10 |
Assume that Firm X acquires Firm Y by issuing long-term debt to purchase all the shares outstanding at a merger premium of $5 per share. Assuming that neither firm has any debt before the merger, what would be the total assets for the new company XY.
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Financial Management Core Concepts
Authors: Raymond M Brooks
3rd edition
133866696, 978-0133866698
