Given the Following Data If Firm a Offers 250,000 Shares to Firm B's Shareholders,calculate

question 49

Multiple Choice

Given the following data: $$\begin{array} { l c c c } & \text { Firm A } & \text { Firm B } & \text { Firm AB (after merger of A and B) } \\\text { Market Price per share } & \$ 20 & \$ 10 & \\\text { Number of shares } & 1,000,000 & 500,000 & \\\text { Market value of the firm } & \$ 20 \text { million } & \$ 5 \text { million } & \$ 30 \text { million }\end{array}$$
If Firm A offers 250,000 shares to Firm B's shareholders,calculate the cost of the merger:

• A)$2 million
• B)$3 million
• C)$1 million

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Definitions:

Strict Liability

Legal responsibility for damages or injury, even if the person found strictly liable was not at fault or negligent.

Odometer

An instrument used to measure the distance traveled by a vehicle.

Disclosure Statement

A document that provides essential information about a financial product, investment, or business opportunity.

Actual Mileage

The real distance that a vehicle has traveled, as opposed to the distance indicated by an odometer, which can be inaccurate or tampered with.