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

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Definitions:

Retailer-sponsored Cooperative

A group of independent retailers who collectively purchase goods, share marketing efforts, and distribution channels to compete with larger chains effectively.

Service-sponsored Retail System

A retail network established by a service provider to sell or distribute its services directly to consumers.

Administered Cooperative System

A system where a central agency coordinates the activities of a group of cooperative entities, ensuring efficiency and uniformity in operations.

Franchising

A business practice in which a company allows another operator to trade under its brand in return for a fee or license.