Which of the Following Statements Seems Most Correct About a Firm

question 89

Multiple Choice

Which of the following statements seems most correct about a firm that has made a cash tender offer for 2 million shares of ABC Corp.at a price of $20,which is $6 higher than ABC's current value?

• A) The economic gain of the merger exceeds $40 million.
• B) The economic gain of the merger exceeds $28 million.
• C) The economic gain of the merger exceeds $12 million.
• D) The economic gain of the merger would be zero after accounting for merger cost.