Question
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750
Use the following information to answer the question. Round your answers if necessary, to two decimal places.
Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed.
Firm A: Number of Shares = 10,000 ; Price per Share = $25.00
Firm B: Number of Shares = 10,000 ; Price per Share = $10.00
What is the cost of acquisition when stock financing is used?
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Ethics In Finance
Authors: John R. Boatright
3rd Edition
1118615824, 978-1118615829
