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

question 249

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 value of firm AB if the merger is an all-stock deal?

• A) $720,000
• B) $800,000
• C) $962,000
• D) $1,092,000
• E) $1,172,000

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Definitions:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Fresh Fruit Smoothies

Blended beverages made from fresh fruits, often combined with ice, yogurt, or milk, offering a healthy and refreshing option.

Distributorship

An arrangement in which a manufacturer or another supplier grants a business the right to sell its products.

Manufactured

The process of converting raw materials into finished goods through the use of equipment, labor, and processes.