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Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of

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Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares - 10,000; Price per Share - $25.00 Firm B: Number of Shares - 10,000; Price per Share - $10.00 a) How many shares of A, at their current price, will be given to firm B's stockholders in the stock-financed deal? b) What will be the price per share of the post-merger firm if payment is made in stock? c) What is the cost of acquisition when stock financing is used? d) What will be the value of the post-merger firm following a cash acquisition? e) What will be the value of the post-merger firm if firm B's stockholders are paid in stock

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