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

question 99

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 outstanding stock will firm AB have if the merger is a cash deal?

• A) 36,400
• B) 40,000
• C) 43,600
• D) 46,000
• E) 52,000

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