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Both fiRms Are 100% Equity-fiNanced

question 320

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Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. What is the NPV of acquiring firm B when stock financing is used? A) $3,746 B) $3,925 C) $4,122 D) $5,000 E) $5,510 What is the NPV of acquiring firm B when stock financing is used?

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