Question
Firm A $ Price Per Share Shares Outstanding (millions of shares) Total Value (millions) Firm B Firm AB 4 $ 6 50 50 200 $
Firm A $ Price Per Share Shares Outstanding (millions of shares) Total Value (millions) Firm B Firm AB 4 $ 6 50 50 200 $ 300 $ 625 $ Firm A is going to acquire Firm B. Firm B will swap 75 million shares of Firm A for the 50 million shares of Firm B. a) What is the implied premium paid for Firm B? b) What will be the post-merger price per share for Firm A's stock? c) If the two firms decide to split the synergies equally, how many new shares of Firm A would the target shareholders receive?
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Answer Lets calculate the implied premium postmerger price per share for Firm As stock and the numbe...
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Managerial Accounting
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
1st Canadian Edition
978-0132490252, 132490250, 978-0176223311
