Firm B's 1 Million Shares of Stock Currently Sell for $20

question 62

Multiple Choice

Firm B's 1 million shares of stock currently sell for $20 each. Firm A estimates the economic gain from the merger to be $10 million and is prepared to offer $22 cash for each share of B. What percentage of the merger gain will be captured by firm B's shareholders?

• A) 20.00%
• B) 33.33%
• C) 50.00%
• D) 60.00%

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Definitions:

Overfishing

The unsustainable harvesting of fish species at a rate faster than they can reproduce, leading to declining populations.

Reduce Costs

Strategies or actions taken by businesses to decrease expenses and improve profitability without compromising the quality of their products or services.

Allocation

The process of distributing resources, goods, or services according to a specific plan or system.

Productivity

A measure of average output or real output per unit of input. For example, the productivity of labor is determined by dividing real output by hours of work.