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Racing Motors has a market value of $187,000. PJ Racing has 22,500 shares of stock outstanding at a price per share of $43. PJ Racing
Racing Motors has a market value of $187,000. PJ Racing has 22,500 shares of stock outstanding at a price per share of $43. PJ Racing is acquiring Racing Motors in an exchange for 4,350 shares of PJ Racing stock. The merger is expected to create $21,000 of synergy. The postmerger value of the firm will be ____ and the postmerger price per share will be ____.
Multiple Choice
a. $1,215,000; $43.78
b. $1,240,000; $42.89
c. $1,175,500; $43.78
d. $1,865,500; $44.06
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