Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

How many shares of A, at their current price, will be given to firm B's stockholders in the stock-financed deal?

A)

3,000

B)

3,150

C)

3,667

D)

4,250

E)

5,762

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

International Finance For Dummies

Authors: Ayse Evrensel

1st Edition

111852389X, 978-1118523896

More Books

Students also viewed these Finance questions

Question

describe the main employment rights as stated in the law

Answered: 1 week ago