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Firm X is being acquired by Firm Y for 875 shares of Firm Y stock (Firm Y will have additional 875 shares after the acquisition).

Firm X is being acquired by Firm Y for 875 shares of Firm Y stock (Firm Y will have additional 875 shares after the acquisition). The incremental value of the acquisition is $2,500. Firm X has 2,000 shares of stock outstanding at a price of $16 a share. Originally, Firm Y had 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the acquisition using company stock (assuming a new stock price after the acquisition)?

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