If Firms a Is Acquiring Firm B and Bs Shareholders

question 6

Multiple Choice

If firms A is acquiring firm B and Bs shareholders are given the fraction "x" of the combined firm, then the cost of this merger is:

• A) Cost = (PVAB) - (x) PVB
• B) Cost = (x) PVAB - PVB
• C) Cost = PVAB - (x) PVA
• D) Cost = (x) PVAB - (x) PVB

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