Question
Firm A is acquiring Firm B. Firm As share price is $8 and Firm B's share price is $3. Firm A has 1.5 million shares
Firm A is acquiring Firm B. Firm As share price is $8 and Firm B's share price is $3. Firm A has 1.5 million shares outstanding and Firm B has 2 million shares outstanding. Firm A expects a discounted synergistic value of $2.5 million from the merger. If Firm A pays $8 million cash to Firm B's shareholders, what is the value of the merged firm?
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
