The Following Data on a Merger Are Given Firm a Has Proposed to Acquire Firm B at a l

question 58

Multiple Choice

The following data on a merger are given: $\begin{array} { l c l l } & \text { Firm A } & \text { Firm B}&\text { Firm AB } \\\text { Price per share } & \$ 100 & \$ 10 & \\\text { Total eamings } & \$ 500 & \$ 300 & \\\text { Shares outstanding } & 100 & 40 & \\\text { Total value } & \$ 10,000 & \$ 400 & \$ 11,000\end{array}$ Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock.Calculate the NPV of the merger.

• A)$200
• B)$400
• C)$600
• D)$150

---

Definitions:

Maturity Date

The final date by which a loan or other financial instrument must be paid back in full.

Service Charge

A fee collected for services provided, often added to a bill in sectors like banking, hospitality, and restaurants.

Credit Cards

Financial instruments issued by banks that allow cardholders to borrow funds within a pre-approved credit limit for purchases or cash advances.

Appropriate Code

The suitable or relevant code or standard that applies to a specific situation, often in a legal, regulatory, or technical context.