George's Equipment Is Planning on Merging with Nelson Machinery

question 57

Multiple Choice

George's Equipment is planning on merging with Nelson Machinery.George's will pay Nelson's shareholders the current value of their stock in shares of George's Equipment.George's currently has 4,600 shares of stock outstanding at a market price of $31 a share.Nelson's has 1,600 shares outstanding at a price of $38 a share.What is the value per share of the merged firm?

• A)$30.77
• B)$31.00
• C)$31.29
• D)$31.74
• E)$32.06

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Definitions:

Economic Grounds

The financial or monetary basis for decisions or actions, often referring to the justification for economic policies or business strategies.