Firm a Is Being Acquired by Firm B for $54,000

question 18

Multiple Choice

Firm A is being acquired by Firm B for $54,000 worth of Firm B stock.The incremental value of the acquisition is $5,600.Firm A has 2,400 shares of stock outstanding at a price of $19 a share.Firm B has 2,700 shares of stock outstanding at a price of $50 a share.What is the actual cost of the acquisition using company stock?

• A)$50,509
• B)$52,276
• C)$53,200
• D)$56,780
• E)$60,600

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Definitions:

Higher Authority's Orders

Directives issued by individuals or bodies in higher positions of power or hierarchy, which are expected to be followed by those at lower levels.

Agentic State

The psychological condition in which an individual sees themselves as an agent executing orders, often used to explain obedience to authority figures.

Higher Authority

A position of power or control above others, often within an organizational or governmental structure.

Referent Power

Referent power is a form of influence based on the charismatic appeal or personal attraction of the power-holder, leading others to identify with or seek approval from the individual.