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Suppose you have the following information concerning an acquiring firm (A) and a target firm (B). Neither firm has any debt. The incremental value of
Suppose you have the following information concerning an acquiring firm (A) and a target firm (B). Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock.
Firm A | Firm B | |
Number of Shares | 50,000 | 18,000 |
Price per Share | $50.00 | $22.50 |
What is the NPV of acquiring Firm B?
Select one:
A. $162,015
B. The NPV is negative
C. $102,120
D. $118,156
E. $94,588
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