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

question 40

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. How many shares of firm A will be used to acquire firm B in an all-stock deal?

• A) 12,000
• B) 20,667
• C) 22,333
• D) 22,667
• E) 23,333