DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000. What is the price per share after the merger?
A) $15.00
B) $17.50
C) $20.00
D) $22.50
E) $25.00

Question

DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000.  What is the price per share after the merger?
A) $15.00 
B) $17.50 
C) $20.00 
D) $22.50 
E) $25.00

Quizplus · Accepted Answer

The Answer of DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000.  What is the price per share after the merger?
A) $15.00 
B) $17.50 
C) $20.00 
D) $22.50 
E) $25.00

DEF Stockholders Are Paid the Current Market Value of Their