The Following Data on a Merger Are Given

question 24

Multiple Choice

The following data on a merger are given:

Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock. Calculate the NPV of the merger.

• A)$200
• B)$400
• C)$600
• D)$150

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Definitions:

Deduction

A method of reasoning from the general to the specific where the conclusion necessarily follows from the premises.

Argument By Analogy

A form of reasoning in which a similarity between two situations is used to infer a similar attribute or conclusion.

Cellos

A stringed musical instrument of the violin family, larger than the viola and with a deeper sound.

Premises

Statements or propositions that are presented as the basis for a conclusion, forming the groundwork of an argument or logical reasoning.