Neither Acquiring Firm a nor Target Firm B Has Any

question 41

Multiple Choice

Neither acquiring firm A nor target firm B has any debt. The incremental value of the proposed acquisition is estimated to be $250,000. Firm B is willing to be acquired for $30 per share in cash. What are the synergistic benefits that arise from the acquisition of firm B?

• A) $138,000
• B) $250,000
• C) $405,000
• D) $655,000
• E) $920,000