Sleep Tight Is Acquiring Restful Inns for $52,500 in Cash

question 16

Multiple Choice

Sleep Tight is acquiring Restful Inns for $52,500 in cash. Sleep Tight has 3,000 shares of stock outstanding at a market price of $38 a share. Restful Inns has 2,100 shares of stock outstanding at a market price of $24 a share. Neither firm has any debt. The incremental value of the acquisition is $1,700. What is the price per share of Sleep Tight after the acquisition?

• A) $36.92
• B) $37.30
• C) $37.87
• D) $39.19
• E) $39.29

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Definitions:

Taxed

The imposition of financial charges or levies upon an individual or an entity by a governing body in order to fund public expenditures.

Canon Law

A set of ecclesiastical laws, regulations, and principles set by ecclesiastic authority (for example, the Church) for its government.

Western Church

Refers to the Roman Catholic Church, especially in the context of its distinction from the Eastern Orthodox Church following the Great Schism of 1054.

Civil Law

A legal system originating in Continental Europe, where laws are written and codified, as opposed to being determined by precedent; it governs private matters such as contracts, property, and family law.