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Both Firms Are 100% Equity-Financed

Question 160

Multiple Choice

Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. What is the merger premium over firm B's stock price? A) 8.50% B) 9.25% C) 10.00% D) 10.25% E) 11.50% What is the merger premium over firm B's stock price?


A) 8.50%
B) 9.25%
C) 10.00%
D) 10.25%
E) 11.50%

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