Suppose you have the following information concerning an acquiring firm (A) and a target firm (B). Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock. What is the value of Firm B to A in this case?
A) $138,000
B) $250,000
C) $405,000
D) $655,000
E) $920,000

Question

Suppose you have the following information concerning an acquiring firm (A) and a target firm (B). Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock.  What is the value of Firm B to A in this case?
A) $138,000 
B) $250,000 
C) $405,000 
D) $655,000 
E) $920,000

Quizplus · Accepted Answer

The Answer of Suppose you have the following information concerning an acquiring firm (A) and a target firm (B). Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock.  What is the value of Firm B to A in this case?
A) $138,000 
B) $250,000 
C) $405,000 
D) $655,000 
E) $920,000

Suppose You Have the Following Information Concerning an Acquiring Firm