Firm a Is Planning on Merging with Firm B

question 53

Multiple Choice

Firm A is planning on merging with Firm B. Firm A will pay Firm B's stockholders the current value of their stock in shares of Firm A. Firm A currently has 3,000 shares of stock outstanding at a market price of $15 a share. Firm B has 1,000 shares outstanding at a price of $10 a share. What is the value of the merged firm?

• A) $25,000
• B) $45,000
• C) $55,000
• D) $60,000
• E) None of these

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Definitions:

Percent

A mathematical term denoting a part or fraction of a hundred, commonly used to express proportions or ratios.

Benign Tumors

Non-cancerous growths in the body that are not invasive and do not spread to other parts.

Significant Health

Refers to the overall state of physical, mental, and social well-being that is free from major diseases or health issues, significantly impacting an individual's quality of life.

Other Tissues

Refers to various types of bodily tissues aside from the ones specifically mentioned, encompassing a wide range of cellular structures and functions.