Goodday & Sons is being acquired by Baker for £19,000 worth of Baker equity.Baker has 1,500 shares of equity outstanding at a price of £25 a share.Goodday has 1,000 shares outstanding with
A market value of £16 a share.The incremental value of the acquisition is £2,000.How many new
Shares of equity will be issued to complete this acquisition?
A)760.0 shares
B)840.0 shares
C)960.0 shares
D)1,187.5 shares
E)1,312.5 shares

Question

Quizplus · Accepted Answer

To complete the acquisition, Baker needs to issue £19,000 worth of equity. Since Baker's shares are priced at £25 each, the number of new shares to be issued is £19,000 / £25 = 760 shares.

Goodday & Sons Is Being Acquired by Baker for £19,000