Given the following data: If Firm A intends to pay $7 million cash for B, calculate the cost of this merger:

Name: Given the following data: If Firm A intends to pay $7 million cash for B, calculate the cost of this merger:
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Question

Given the following data:  If Firm A intends to pay $7 million cash for B, calculate the cost of this merger:

Quizplus · Accepted Answer

The cost of the merger is simply the amount paid by Firm A, which is $7 million, minus the value of company B, which is already given as $5 million. Therefore, the cost of the merger is $2 million.

Given the Following Data: If Firm a Intends to Pay