Firm A is being acquired by Firm B for $35,000 worth of Firm B stock. The incremental value of the acquisition is $2,500. Firm A has 2,000 shares of stock outstanding at a price of $16 a share. Firm B has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the acquisition using company stock?
A) $34,750
B) $34,789
C) $35,000
D) $35,289
E) $35,500

Question

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The Answer of Firm A is being acquired by Firm B for $35,000 worth of Firm B stock. The incremental value of the acquisition is $2,500. Firm A has 2,000 shares of stock outstanding at a price of $16 a share. Firm B has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the acquisition using company stock?
A) $34,750
B) $34,789
C) $35,000
D) $35,289
E) $35,500

Firm a Is Being Acquired by Firm B for $35,000