Neither Acquiring Firm a nor Target Firm B Has Any

question 334

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 is the price per share of the merged firm after the acquisition is completed?

• A) $50.00
• B) $52.30
• C) $56.46
• D) $58.76
• E) $61.24

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Definitions:

Regression Line

A line of best fit through a scatter plot of data points that shows the relationship between two variables.

API Gravity Degrees

A measure of how heavy or light a petroleum liquid is compared to water.

Oil Quality

A measure of the physical and chemical properties of oil, indicating its suitability for various uses or its compliance with standards.

Price Per Barrel

The cost of a barrel of commodities like oil, typically used as a benchmark for pricing.