DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000. What is the number of shares in the new firm?
A) 28,600
B) 29,000
C) 30,400
D) 32,000
E) 32,500

Question

DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000.  What is the number of shares in the new firm?
A) 28,600 
B) 29,000 
C) 30,400 
D) 32,000 
E) 32,500

Quizplus · Accepted Answer

The Answer of DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000.  What is the number of shares in the new firm?
A) 28,600 
B) 29,000 
C) 30,400 
D) 32,000 
E) 32,500

DEF Stockholders Are Paid the Current Market Value of Their