Question
Firm A is acquiring Firm B. Firm As share price is $6 and Firm B's share price is $3.50. Firm A has 3 million shares
Firm A is acquiring Firm B. Firm As share price is $6 and Firm B's share price is $3.50. Firm A has 3 million shares outstanding and Firm B has 1.8 million shares outstanding. Firm A expects a discounted synergistic value of $2.5 million from the merger. If Firm A pays $7.5 million cash to Firm B's shareholders, what is the value of the merged firm? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.)
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