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:

Factoring

The process of breaking down an expression into a product of simpler factors.

Equation

A declaration that confirms two expressions are identical, often including at least one variable.

Factoring

The mathematical process of breaking down an expression into a product of its simpler factors.

Factoring

The process of breaking down an equation or number into its constituent parts, or 'factors', that multiply together to form the original number or equation.