Companies a and B Are Valued as Follows Company a Now Acquires B by Offering One (New) Share

question 12

Multiple Choice

Companies A and B are valued as follows: $\begin{array} { l c l } & \mathrm { A } & \mathrm { B } \\\# \text { of shares } & 2000 & 1000 \\\text { Earnings per share } & \$ 10 & \$ 10 \\\text { Share price } & \$ 100 & \$ 50\end{array}$ Company A now acquires B by offering one (new) share of A for every two shares of B (that is, after the merger, there are 2,500 shares of A outstanding) .Suppose that the merger really does increase the value of the combined firms by $20,000..What is the cost of the merger?

• A)zero
• B)$2,000
• C)$8,000
• D)$4,000

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Definitions:

Ventromedial Amygdala

A region in the amygdala involved in emotional processes, including fear and aggression.

Basolateral Amygdala

Part of the brain's limbic system, involved in processing emotions and memory, and plays a critical role in response to stress and fear.

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in complex behaviors including planning, decision making, and moderating social behavior.

Conditioned Stimulus

A previously neutral stimulus that, after being associated with an unconditioned stimulus, eventually triggers a conditioned response.