The Sligo Co

question 10

Multiple Choice

The Sligo Co.is planning on merging with the Thorton Co.Sligo will pay Thorton's equityholders the current value of their equity in shares of Sligo.Sligo currently has 2,300 shares of equity
Outstanding at a market price of £20 a share.Thorton has 1,800 shares outstanding at a price of £15
A share.How many shares of equity will be outstanding in the merged firm?

• A)1,800 shares
• B)2,300 shares
• C)2,750 shares
• D)3,650 shares
• E)4,100 shares

---

Definitions:

General Ledger Account

A comprehensive record containing all the financial transactions of a business.

Aging

A method used in accounting to categorize a company's accounts receivables according to the length of time an invoice has been outstanding.

Accounts Receivable

The funds owed to a company by customers for goods or services delivered or used but not yet paid for.