XYZ Has a Market Value of $287,400

question 1

Multiple Choice

XYZ has a market value of $287,400.ABC has a market value of $611,900.ABC believes it can create $57,000 of synergy if it acquires XYZ for $300,000 in cash.What is the value of ABC following the merger? Assume both firms are all-equity financed.

• A)$656,300
• B)$998,900
• C)$956,300
• D)$668,900
• E)$368,900

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Definitions:

Win-Win Solution

A resolution to a conflict where all parties involved obtain a favorable outcome.

Collaboration

The process of two or more people or organizations working together to complete a task or achieve a goal.

Necessary

Required to be done, achieved, or present; needed; essential.

Win-Lose Strategy

An approach in negotiation or conflict resolution where one party aims to secure their interests at the expense of the other's, often resulting in a zero-sum outcome.