Sleep Tight Is Acquiring Restful Inns for $52,500 in Cash

question 16

Multiple Choice

Sleep Tight is acquiring Restful Inns for $52,500 in cash. Sleep Tight has 3,000 shares of stock outstanding at a market price of $38 a share. Restful Inns has 2,100 shares of stock outstanding at a market price of $24 a share. Neither firm has any debt. The incremental value of the acquisition is $1,700. What is the price per share of Sleep Tight after the acquisition?

• A) $36.92
• B) $37.30
• C) $37.87
• D) $39.19
• E) $39.29

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Definitions:

Empirical Approach

A method of inquiry that relies on direct observation and experimentation to gather evidence and knowledge.

Psychodynamic Perspective

A psychological approach that emphasizes the systematic study of psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Observational Methods

Research techniques involving the systematic recording of observable behaviors or events in their natural settings.

Confidentiality

A principle that ensures information is shared or disclosed only to individuals who are authorized to have access to it.