Companies a and B Are Valued as Follows

question 12

Multiple Choice

Companies A and B are valued as follows:

Company A now acquires B by offering one (new) share of A for every two shares of B (that is, after the merger, there are 2,500 shares of A outstanding) . Suppose that the merger really does increase the value of the combined firms by $20,000. . What is the cost of the merger?

• A)zero
• B)$2,000
• C)$8,000
• D)$4,000

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Definitions:

Thymus Gland

An organ located in the chest, which plays a vital role in the development and maturation of T-cells, essential for the immune response.

Reticular Fibers

Fine, branching fibers forming networks in various tissues and supporting cells in organs like the spleen and lymph nodes.

Medulla

The innermost part of an organ or structure, often referring to the medulla oblongata in the brain, which controls vital functions such as breathing and heart rate.

Lymphocytes

White blood cells that play a crucial role in the immune system, responsible for producing antibodies and other substances to fight infections.