The Sheridan Corporation Is Considering a Merger with the Kent

question 34

Multiple Choice

The Sheridan Corporation is considering a merger with the Kent Company which has 600,000 outstanding shares selling for $20.An investment dealer has advised that to succeed in its merger Sheridan Corp.would have to offer $40 per share for Kent's stock.Sheridan Corp.stock is selling for $25.How many shares of Sheridan Corp.stock would have to be exchanged to acquire all of Kent's stock?

• A) 960,000 shares
• B) 600,000 shares
• C) 750,000 shares
• D) 480,000 shares

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity.

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.

Statement

A formal document summarizing the financial position or performance of an entity, such as an income statement or balance sheet.

Operating Activity

Activities directly related to the primary business operations of a company, including production, distribution, and sales of goods and services.