Firm B Is Willing to Be Acquired by Firm a at a Price

question 248

Multiple Choice

Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000. What is the amount of the merger premium per share if firm A acquires firm B in an all cash deal?

• A) $3.00
• B) $3.67
• C) $6.67
• D) $24.33
• E) $27.33

Understand the role of environmental analysis in identifying business strengths and weaknesses.

Acknowledge the role of green marketing and ethical considerations in contemporary business practices.

Understand the concept and importance of strategic planning in businesses.

Recognize the role of environmental analysis in strategic planning.

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Definitions:

New Capital

Funds or assets newly invested for the purpose of generating additional income or growth.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or offer a service at a lower opportunity cost than competitors.

Capital

Resources made and used by people to produce and distribute goods and services, including buildings, machinery, tools, and equipment.