Firm B's One Million Shares of Stock Currently Sell for $12

question 95

Multiple Choice

Firm B's one million shares of stock currently sell for $12 each, but Firm A is preparing an $18 per share tender offer.Firm A estimates the gain of the merger to be $6 million.What% of the merger gains will be captured by B's stockholders?

• A)33.33%
• B)50.00%
• C)66.67%
• D)75.00% NPV = overall gain - gain captured by B's shareholders.
• $6 million = overall gain - $6 million
• $12 million = overall gain

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