Firm A can acquire Firm B for $$80,000$ in cash or with stock worth $$80,000$ priced at its current price of $$25$ per share of stock. The synergy value of the deal is $$25,000.$ Both firms are $100\%$

equity$-$financed Firm A Firm B

Number of Shares : Firm A $=10,000$ Firm B$=7,500$

Price per Share: Firm A $=$$$25\mathrm{.}00$ Firm B$=$$$10\mathrm{.}00$

What will be the value of the post$-$merger firm following a cash acquisition?

a $)$ $$270,000$

b$)$ $$271,250$

c$)$ $$337,500$

d$)$ $$350,000$

What will be the value of the post$-$merger firm if Firm B$$s stockholders are paid in stock?

a$)$ $$450,000$

b$)$ $$340,000$

c$)$ $$350,000$

d$)$ $$550,000$

How many shares of A$,$ at their current price, will be given to Firm B$$s stockholders in the stock$-$financed deal?

a$)3,000$

b$)3,200$

c$)3,667$

d$)4,250$

e$)5,762$

What will be the price per share of the post$-$merger firm if payment is made in stock?

a$)$ $$24\mathrm{.}00$

b$)$ $$26\mathrm{.}52$

c$)$ $$28\mathrm{.}35$

d$)$ $$29\mathrm{.}71$

What is the cost of acquisition when stock financing is used?

a$)$ $$80,000\mathrm{.}15$

b$)$ $$81,555\mathrm{.}70$

c$)$ $$82,500\mathrm{.}30$

d$)$ $$84,848\mathrm{.}48$

$8.$ What is the NPV of acquiring firm A when stock financing is used?

a$)$ $$15,151\mathrm{.}52$

b$)$ $$17,340\mathrm{.}78$

c$)$ $$16,159\mathrm{.}70$

d$)$ $$15,640$