Question
Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or stock. The incremental value
Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or
stock. The incremental value of the proposed acquisition is estimated at $80,000.
What is the value of firm AB if the merger is an all-stock deal?
Firm A Firm B
Number of Share 40000 12000
price per share $ 18 $31
Debt $ 0 $0
How to get $1,172,000 as an answer
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
