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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