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The pre-merger information about Firm M and Firm T is provided in the table below. The shareholders of Firm T have voted in favor of
The pre-merger information about Firm M and Firm T is provided in the table below. The shareholders of Firm T have voted in favor of a buyout offer from Firm M, and have demanded $50 per share in cash. The synergy from the merger is estimated at $100,000. What would be the merger premium?
Company Shares outstanding Price per share
M 50,000 $80
T 20,000 $42
A) $600,000 B) $1,500,000 C) $400,000 D) $160,000 E) $260,000
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