Consider the Following Premerger Information About a Bidding Firm (Firm

question 51

Multiple Choice

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T) .Assume that neither firm has any debt outstanding. Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $2,500.What is the NPV of the merger assuming that Firm T is willing to be acquired for $28 per share in cash?

• A)$100
• B)$400
• C)$1,800
• D)$2,200
• E)$2,600