Question $25$

Firm A is planning on merging with Firm B$.$ Firm A will pay to Firm B$\text{'}$s current shareholders

the current value of their stock, using shares of Firm $A$ as the form of payment. Firm $A$

currently has $2,800$ shares of stock outstanding at a market price of $$16$ per share. Firm B

has $4,000$ shares outstanding at a price of $$12$ per share. The expected synergy created by

the merger is $$3,600.$ What is the value of the merged firm?

$$426,750$

$$401,850$

$$820,490$

$$96,400$

$$120,200$