Delta Is Being Acquired by Gamma

question 157

Multiple Choice

Delta is being acquired by Gamma. The incremental value of the acquisition is $1,600. Delta has 1,200 shares of stock outstanding at a price of $22 a share. Gamma has 3,100 shares of stock outstanding at a price of $50 a share. What is the net present value of the acquisition given that the actual cost of the acquisition using company stock is $27,575?

• A) $289
• B) $377
• C) $407
• D) $425
• E) $436

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Definitions:

Startup Costs

Initial expenses required to establish a new business, including legal fees, marketing, equipment, and rent.

Business Metrics

Quantitative measures used to track and assess the status or performance of various aspects of a business.

High-Growth CEOs

Refers to chief executive officers who successfully lead their companies through significant and rapid revenue and market share expansion.

Fast-Growth Companies

Businesses that experience a rapid increase in revenue or size within a short period, often driven by innovative products or services.