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 merger premium per share in this case?
A) $0
B) $2.50
C) $7.50
D) $10.00
E) $30.00

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 merger premium per share in this case?
A) $0 
B) $2.50 
C) $7.50 
D) $10.00 
E) $30.00

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 merger premium per share in this case?
A) $0 
B) $2.50 
C) $7.50 
D) $10.00 
E) $30.00

Suppose You Have the Following Information Concerning an Acquiring Firm