Firm X Has a Market Value of $8,400 with 120

question 70

Multiple Choice

Firm X has a market value of $8,400 with 120 shares outstanding and a price per share of $70.Firm Y has a market value of $2,000 with 100 shares outstanding and a price per share of $20.Firm X is acquiring Firm Y by exchanging 30 of its shares for all 100 of Firm Y's shares.Assume the merger creates $400 of synergy.What will be the value of Firm A's shareholders' stake in the merged firm?

• A)$8,080
• B)$9,200
• C)$8,820
• D)$8,640
• E)$9,050

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Definitions:

Floating GAAP

Generally Accepted Accounting Principles that are adaptable and can change over time with financial reporting standards.

Regulatory Accounting

Accounting practices and policies that are guided by regulatory bodies to ensure transparency, accuracy, and compliance in financial reporting.

Conflicts of Interest

Situations where a person's private interests might interfere with their professional duties or responsibilities.