Firm a Is Planning on Merging with Firm B

question 40

Multiple Choice

Firm A is planning on merging with Firm B.Firm A currently has 2,300 shares of stock outstanding at a market price of $20 a share.Firm B has 750 shares outstanding at a price of $15 a share.The merger will create $200 of synergy.How many of its shares should Firm A offer in exchange for all of Firm B's shares if it wants its acquisition cost to be $12,000?

• A)598
• B)607
• C)600
• D)584
• E)593

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Definitions:

P-value

The probability of observing a test statistic as extreme as, or more than, the value observed under the assumption that the null hypothesis is true.

Pilots' Union

An organization representing the collective interests of pilots, often focused on negotiating wages, working conditions, and other employment matters.

Null Hypotheses

A hypothesis used in statistical testing that assumes no effect or no difference between treatments or groups.

Correction Factor

An adjustment applied to a calculation or a measurement to correct or compensate for a systematic bias or deviation.