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

question 10

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 NPV of acquiring firm B if the merger is an all cash deal?

• A) $36,000
• B) $44,000
• C) $80,000
• D) $116,000
• E) $128,000

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Definitions:

Single Bond

A chemical bond between two atoms involving two electrons (one from each atom) forming a pair, sharing a single pair of electrons.

Organic Chemistry

The branch of chemistry that studies the structure, properties, composition, reactions, and synthesis of compounds that contain carbon.

Synthesis

Synthesis refers to the process of combining two or more components to produce a compound or complex whole, a common concept in chemistry for creating new substances.

Pharmaceuticals

Medicinal drugs manufactured for use in medical diagnosis, treatment, or prevention of diseases.