The Prada Corporation Is Considering a Merger with the Stone

question 47

Multiple Choice

The Prada Corporation is considering a merger with the Stone Company, which has 500,000 outstanding shares selling for $30. An investment banker has advised that to succeed in its merger, Prada Corp. would have to offer $45 per share for Stone's stock. Prada Corp. stock is selling for $25. How many shares of Prada Corp. stock would have to be exchanged to acquire all of Stone's stock?

• A)266,667
• B)600,000
• C)900,000
• D)None of these options

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Definitions:

Budgeting Formulas

The set of calculations used to estimate future income, expenses, and capital needs for a business or individual.

Administrative Expenses

Administrative expenses are the costs related to the general operation of a business, including salaries of non-production staff, office supplies, and utilities.

Tenant-Days

A metric used in real estate or lodging industries, calculated by multiplying the number of tenants by the number of days they occupied a space.

Planning Budget

A budget prepared for a specific period in the future that serves as a plan for the company's operations and financial activities.