The following data on a merger is given:

Firm A Firm B Firm AB

Price per share $$100$ $$10$

Total earnings $$500$ $$300$

Shares outstanding $10040$

Total value $$10,000$ $$400$ $$11,200$

Firm A has proposed to acquire Firm B at a price of $$20$ per share for Firm B$\text{'}$s stock. What will be the post$-$merger price per share for Firm A$\text{'}$s stock if Firm A pays in cash? Total value of Firm AB represents total value in a stock acquisition, where all value remains in the firm.

Selected Answer:

Answers:

$$108$

$$110$

$$104$

$$114$