Firms a and B Are Each Worth $50 Million, but Generate

question 101

Multiple Choice

Firms A and B are each worth $50 million, but generate a $20 million gain when merged.If the cost of the merger was $5 million, how much did Firm A pay for Firm B?

• A)$50 million
• B)$55 million
• C)$60 million
• D)$65 million

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Definitions:

Contracting Out

The process of hiring external service providers to perform tasks, handle operations or provide services that are either difficult to manage or are outside the company's expertise.

Human Capital Shortages

A situation where there is a lack of skilled individuals available in the labor market to meet the demands of employers.

Developing Employees Internally

The process of investing in the growth and development of an organization's current employees to prepare them for future roles and leadership positions.

External Supply

Refers to the availability of resources or goods from outside the organization.