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Firm Q Is Being Acquired by Firm S for £30,000

Question 49

Multiple Choice

Firm Q is being acquired by Firm S for £30,000 worth of Firm S equity.The incremental value of the acquisition is £2,000.Firm Q has 1,900 shares of equity outstanding at a price of £15 a share.Firm S
Has 1,500 shares of equity outstanding at a price of £40 a share.What is the net present value of
The acquisition given that the actual cost of the acquisition using company equity is £30,167?


A) £167
B) £225
C) £333
D) £425
E) £433

Correct Answer:

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