The Prad Corporation Is Considering a Merger with the Stone

question 40

Multiple Choice

The Prad Corporation is considering a merger with the Stone Company which has 500,000 outstanding shares selling for $30. An investment banker has advised that to succeed in its merger Prad Corp. would have to offer $45 per share for Stone's stock. Prad Corp. stock is selling for $25. How many shares of Prad Corp. stock would have to be exchanged to acquire all of Stone's stock?

• A) 266,667
• B) 600,000
• C) 900,000
• D) none of these

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Definitions:

Foreign Country

A nation different from one's own, especially in terms of home or operational base.

Strategic Control

A process used by organizations to monitor and regulate their strategies in order to achieve their long-term goals.

Home-country Firm

A business that operates from the country where it was established, contrasting with its operations or subsidiaries abroad.

Culture

The set of shared attitudes, values, goals, and practices that characterizes an organization or group.