Firm a Has a Value of $200 Million and Firm

question 7

Multiple Choice

Firm A has a value of $200 million and Firm B has a value of $120 million. Merging the two would enable cost savings with a present value of $30 million. Firm A purchases Firm B for $130 million. How much do Firm A's shareholders gain from this merger?

• A)$30 million
• B)$20 million
• C)$15 million
• D)$10 million

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Definitions:

Official Seal

A stamp or emblem used as a formal sign of authentication by an organization or individual in official documents.

Complaint

In legal contexts, the initial document filed by a plaintiff in a court to initiate a lawsuit, outlining the basis for the claim and the relief sought.

Witness Signature

A signature by an uninvolved party on a document, acknowledging they observed the signing process and verifying its authenticity.

Notary Public

A public officer authorized to witness the signing of important documents, administer oaths, and perform other administrative functions.