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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

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

b. What will be the value of the post-merger firm if firm B's stockholders are paid in stock?

c. What will be the price per share of the post-merger firm if payment is made in stock?

d. What is the NPV of acquiring firm A when stock financing is used?

e. What will be the value of the post-merger firm following a cash acquisition?

f. What is the cost of acquisition when stock financing is used?

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