Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000. What is the NPV of the merger of firm B by firm A in an all-stock deal?
A) $28,127
B) $31,000
C) $37,639
D) $42,877
E) $44,000

Question

Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000.  What is the NPV of the merger of firm B by firm A in an all-stock deal?
A) $28,127 
B) $31,000 
C) $37,639 
D) $42,877 
E) $44,000

Quizplus · Accepted Answer

The Answer of Firm B is willing to be acquired by firm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000.  What is the NPV of the merger of firm B by firm A in an all-stock deal?
A) $28,127 
B) $31,000 
C) $37,639 
D) $42,877 
E) $44,000

Firm B Is Willing to Be Acquired by Firm a at a Price