Question
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $36,000 $14,000 Shares outstanding 18,000 18,000 Per-share values:
| Consider the following premerger information about Firm X and Firm Y: |
| Firm X | Firm Y | |
| Total earnings | $36,000 | $14,000 |
| Shares outstanding | 18,000 | 18,000 |
| Per-share values: | ||
| Market | $44 | $16 |
| Book | $18 | $6 |
| Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $4 per share. Assuming that neither firm has any debt before or after the merger, what are the total assets of Firm X after the merger? |
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
9th Edition
032431986X, 9780324319866
