Firm a Has a Value of $100 Million, and B

question 43

Multiple Choice

Firm A has a value of $100 million, and B has a value of $60 million. Merging the two would allow a cost savings with a present value of $20 million. Firm A purchases B for $65 million. How much do firm A's shareholders gain from this merger?

• A) $30 million
• B) $20 million
• C) $15 million
• D) $5 million

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Definitions:

Customer Excellence Strategy

A business approach that focuses on providing outstanding customer service and value to achieve loyalty and superior customer satisfaction.

Locally Owned

Businesses that are owned, operated, and situated within a specific local community or area.

Value-based Marketing

A marketing approach that focuses on delivering products and services that provide superior value to customers, leading to strong brand loyalty and higher customer satisfaction.

Perceived Value

The relationship between a product’s or service’s benefits and its cost.