Firm B Is Willing to Be Acquired by fiRm a at a Price

question 279

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 true cost of the acquisition of firm B by firm A in an all-stock deal?

• A) $401,807
• B) $408,000
• C) $423,873
• D) $432,939
• E) $488,000

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Definitions:

Minimum Wage

The lowest legal hourly pay rate that employers can offer to workers.

Quantity Supplied

The total amount of a product or service that sellers are willing and able to sell at a given price, over a specified period of time.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price over a specified period.

Efficiency Wage

A wage rate set above the market equilibrium to increase productivity and efficiency among workers by attracting and retaining higher-quality employees.