Question
Salmon Enterprises can acquire Trout, Inc for $250,000 in either cash or stock. Both companies are 100% equity financed. The synergy value of the acquisition
Salmon Enterprises can acquire Trout, Inc for $250,000 in either cash or stock. Both companies are 100% equity financed. The synergy value of the acquisition for Salmon is $35,000. Currently Salmon has 25,000 shares outstanding which trade at $29 a share, whereas Trout has 15,000 shares outstanding that trade at $14 a share.
15. What is the merger premium over Trout's stock price? A. 19% B. 16% C. 21% D. 23%
16. What is the value of Trout to Salmon? A. $235,000 B. $245,000 C. $260,000 D. $285,000
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
