Western Farms just paid $65,000 cash to acquire Northern Foods.Prior to the acquisition Western Farms had 15,000 shares of stock outstanding at a price per share of $38.Northern Foods had 5,500 shares outstanding at a price per share of $10.75.The acquisition created $12,000 of synergy.What is the value of Northern Foods to Western Farms?

Question

Quizplus · Accepted Answer

V_B^* = (5,500 × $10.75)+ $12,000 = $71,125

Western Farms Just Paid $65,000 Cash to Acquire Northern Foods