Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following data on a merger are given: Firm A price per share $100, total earnings $500, shares outstanding 100, and total value $10,000.

image text in transcribed

The following data on a merger are given: Firm A price per share $100, total earnings $500, shares outstanding 100, and total value $10,000. The corresponding figures for firm B are $10, 300, 40, and $400. The total value of the Firm AB is $11,000. Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock. What will be the postmerger price per share for Firm A's stock if Firm A pays in cash? (0 decimals)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Corporate Finance

Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan

12th edition

007353062X, 73530628, 1260153592, 1260153590, 978-1260153590

More Books

Students also viewed these Accounting questions