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 price per share of the existing firm after the acquisition is completed?
A) $50.00
B) $51.89
C) $52.46
D) $54.76
E) $55.24

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 price per share of the existing firm after the acquisition is completed?
A) $50.00 
B) $51.89 
C) $52.46 
D) $54.76 
E) $55.24

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 price per share of the existing firm after the acquisition is completed?
A) $50.00 
B) $51.89 
C) $52.46 
D) $54.76 
E) $55.24

Suppose You Have the Following Information Concerning an Acquiring Firm