Consider the Following Premerger Information About a Bidding Firm (Firm

question 87

Multiple Choice

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T) .Assume that neither firm has any debt outstanding.
Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $2,500.What is the NPV of the merger assuming that Firm T is willing to be acquired for $28 per share in cash?

• A) $100
• B) $400
• C) $1,800
• D) $2,200
• E) $2,600

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