Hallaman's Auto is being acquired by Macy's Trucking for $32,000 worth of Macy's Trucking stock. Macy's Trucking has 5,500 shares of stock outstanding at a price of $73 a share. Hallaman's Auto has 1,200 shares outstanding with a market value of $25 a share. The incremental value of the acquisition is $12,600. What is the total number of shares in the new firm?

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Macy's Trucking is acquiring Hallaman's Auto by issuing new shares. The value of the acquisition is $32,000, and since Macy's stock is priced at $73 a share, the number of new shares issued for the acquisition is $32,000 / $73 ≈ 438 shares. Adding these new shares to the existing 5,500 shares of Macy's Trucking gives a total of 5,938 shares in the new firm.

Hallaman's Auto Is Being Acquired by Macy's Trucking for $32,000